Analysis of 10-Year Yield and Mortgage Rates
My 2025 forecast predicted the following ranges:
- Mortgage rates expected between 5.75% and 7.25%
- 10-year yield projected to fluctuate between 3.80% and 4.70%
Recent data suggests that the 10-year yield is hovering around 4.35%, reflecting the strength of the economy. Despite concerns about the ongoing trade war, economic indicators have shown resilience. President Trump’s interest in lowering rates highlights the potential impact of trade tensions on economic stability. Positive economic data has led to an increase in the 10-year yield and mortgage rates.
Insights on Mortgage Spreads
While mortgage spreads have improved since their peak in 2023, recent market volatility has impacted their stability. Current spreads suggest that mortgage rates could be significantly lower if returned to normal levels. Historically, mortgage spreads typically range between 1.60% to 1.80%.
Trends in Purchase Application Data
Positive year-over-year growth in purchase application data has been consistent, despite fluctuations in mortgage rates. Recent data indicates a potential slowdown in growth, suggesting a need for monitoring in the coming months. The chart below illustrates the favorable trends in purchase application data.
Weekly data for 2025:
- 7 positive readings
- 6 negative readings
- 3 flat prints
Insights on Total Pending Sales
Recent data on total pending sales indicates positive trends in housing demand, despite higher mortgage rates. The growth in demand suggests potential for further sales growth if rates stabilize around 6%.
Analysis of Weekly Housing Inventory Data
Increased inventory levels in the housing market indicate positive developments for 2024 and 2025. The rise in inventory growth is essential for long-term market stability.
Trends in New Listings Data
Growth in new listings data indicates positive momentum in the housing market. The increase in listings is a step towards returning to normal market conditions.
Impact of Price Cuts
Price cuts have seen an increase compared to previous years, reflecting adjustments in response to rising mortgage rates. Conservative growth forecasts for 2025 align with the current trends in price reductions.
Upcoming Events: Global PMI, Bond Auctions, and Fed Speeches
This week’s focus will be on global PMI data, bond auctions, and speeches by Fed officials. Insights from these events will provide valuable perspectives on managing economic challenges, including the trade war impact. Jobless claims data and purchase application trends will also be monitored closely.
Monitoring these developments will be crucial in understanding the dynamics of the housing market amidst economic uncertainties.