Are We There Yet?
The last several weeks remind me of taking the kids to the Florida Panhandle and being asked about every 30 minutes, “Are we there yet?” The same can be said about mortgage rates. which have staged a very nice rally from close to the mid-7% mark to now approaching the 6.75% mark for the first time since before Christmas. Many factors have been in play the last several weeks, including massive deficit-cutting policies and large tariffs being placed on pretty much all our trading partners in an effort to level the playing field with them. We are also seeing inflation trying to move to lower levels, and surprisingly enough, it could be due to the possible impact of these tariffs. Only time will tell on this one. The U.S. 10-year treasury has also now fallen to levels we have not seen since the first week of December, falling back under 4.25%, which is pretty much in line with the fall in mortgage rates over the same time frame.
So, you would think that home purchases should be picking up steam with this notable drop in mortgage rates. Well… not so much. We have seen basically flat to possibly lower sales as compared to this time last year. It appears that we need to see rates move to even lower levels before the homebuying machine cranks back up. I do believe that we are getting closer to the actual number that should re-ignite the home purchase activity, but we are simply just not there yet. History has shown that once we get near the 6% mark, homebuying activity picks up, and I believe that we could see 30-year fixed rates, on a national average, possibly breach below the 6.5% mark by the end of March. However, that will depend on today’s unemployment data as well as continued improvement in the inflation numbers, which we will be releasing later this month. If we can get a weaker-than-expected employment number coupled with improved inflation numbers we just might see another run in the 10-year treasury to possibly 4% by the end of the month, which should take the national average below 6.5%.
Are we there yet? Not yet… but we are getting closer!!!
Remember… the BEST RATE… IS A LOCKED RATE… with a float down… ask me about our program that allows you to lock your rate and then float down if rates move lower.
Make sure you (or your buyer) get pre-approved before looking at homes so we can determine if you are looking in the correct price range and have you armed to submit an offer with a pre-approval letter!
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Blog post date: Thursday, March 6, 2025
