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Mortgage and Real Estate News Update for Thursday, January 2nd, 2025
Comprehensive Mortgage and Real Estate News Update Summary for Thursday, January 2nd, 2025.
The real estate and mortgage industry has changed since Thursday, January 2, 2025.
Mortgage Rates
Current Rates:
The average 30-year mortgage rate is 6.91%, up from 6.85% last week. This information has been sourced from AP News.
Market Impact:
Reuters reported that increased bond yields and inflationary fear due to expected economic policies have resulted in high rates. These elevated rates might make it hard for people to sell their homes, lowering the housing inventory or making it unaffordable.
Housing Market Activity
Seasonal Slowdown:
- According to the New York Post, December 2024 marked a decline in the housing sector, with homes now selling for 70 days, a five-year record high.
- Moreover, the median listing price dropped from the previous year’s $15,000 to $402,502.
Inventory Levels
The number of available second-hand homes has declined by up to 15% year on year, forcing the average property price in Ireland during the last quarter of 2024 to 332,109 euros, which is 9% more than last year. As of December 1, 2024, fewer than 10,500 second-hand homes were available.
International Developments
- European countries, including Spain, Portugal, and Greece, are discontinuing their golden visa schemes due to housing cost issues.
- Non-lucrative and digital nomad visas are good substitutes for foreign clients seeking residency options.
California Estate
- This transaction sets a new record as the highest residential sale in Cambria’s history.
- What was once $17.22 million is now the new selling price of a 78.5-acre estate just a few steps from California’s Pacific Coast Highway.
- After being on the market for over 15 years, this transaction was sold for quite the price.
Predicted Transactions for 2025
- Economists have set a threshold of roughly a 6.3% rise in mortgage rates through 2025.
- There might be room for further dipping if conditions heat up more.
For the remainder of the calendar year 2025, home supply is set to improve and rise by 11.7%, allowing selling points to move up by a rough percentage of 3.7%.
The mortgage and real estate regions show steady rising market rates alongside seasonal drop in activity levels. However, the landscape is set to reset itself in 2025 to find room for stabilization.
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3 Replies
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Mortgage Rates, Market Activity, and Application lenders in the United States have continuously increased their interest rates to 6.91%, marking a lift from 6.62%. Here are the key highlights from the latest updates:
Current Mortgage Rates
The average rate for a 30-year fixed mortgage is 6.91%, the highest since July 2024. This represents an increase from 6.62% a year ago. Mortgage News Daily reports a slightly higher average of 7.07% for the same mortgage type. With over 15 years of being serviced, the fixed mortgage rate has also increased (now averaged at 6.13%).
Market Activity
Home sales, prevalent mortgages, and adjustable-rate mortgages bearing a grade of 1.95% barely fell below the average. Apart from the rates going up, pending home sales surged by 2.2% from October to November and a whopping 6.9% year over year across all regions.
The Western area witnessed the most increase in pending sales, soaring up 11.8% from the previous year.
The most well-known economic analysts have speculated that buyers are beginning to alter their standards, stating, “There has been a rather abnormal increase in home sales, per month, per region during the course of the year. Folks have slowly begun to adapt to where the sellers are located.”
Mortgage Applications
People’s homes are incredibly valuable today, especially with most people around America considering them a sign of wealth. Because of this, during the holiday season, there was a drastic decline in mortgage applications while simultaneously increasing the slash by 21.9% alongside revenues over two weeks.
Looking Ahead
The forecast for 2025 suggests that mortgage rates may improve. Fannie Mae predicts an average rate of 6.60% at the start and 6.20% at the end of the year.
The MBA projects that rates will remain the same, suggesting that rates will be 6.60% at the start and 6.40% at the end of the year.
The current mortgage sales environment is particularly difficult for buyers due to the greater rates. Sales and inventory levels are high, but buyers are getting used to these new conditions.
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President Trump promised affordability for first-time homebuyers and lower rates. How does the president do to that?
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President Donald Trump has made it clear what steps he plans to take to improve affordability in housing and lower mortgage rates. Below are some of the things he stated:
Regulatory Reductions: Trump plans to remove the cost of housing associated with regulation. By lowering such expenses, he hopes to make homes more accessible.
Increasing Housing Supply: He intends to liberalize more federal land for housing and a lower construction regulation, which is expected to improve the availability of homes and reduce their cost.
Deportation Policies: Trump has consistently said that he intends to deport many undocumented migrants. According to him, that will reduce the demand for housing and subsequently lead to a decrease in the cost of housing.
Tariff Policies: While Trump continues to threaten tariffs on lumber as a construction raw material, which would significantly inflate construction expenses, his recent policy shifts may assist in controlling mortgage rates.
Emergency Price Relief: Trump has given executive orders granting emergency price relief on housing, aiming to lower the cost while increasing the supply.
Those are just a few of his efforts to improve the prices associated with home buying for the commoner. Are those steps effective?
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