"Back in November of 2022, we were experiencing the most significant and fastest home sales crash ever so much so that I even said it looked like existing home sales were heading toward 4 million, when they had had only recently dropped a tad under 5 million. As you can see in the chart below, the crash was epic and happened in just one year. Then, starting from Nov. 9, 2022, mortgage rates began to fall toward 6%, fueling 12 weeks of positive forward-looking data."
"Those 12 weeks gave us one of the largest monthly sales prints in American history; almost 500,000 more homes were bought in February of 2023. So for the next four weeks, regardless of what the holidays do to the data, we have metrics we can track to give us a sense of how the start of 2026 will look, since mortgage rates are near 6% today."
"In my 2025 forecast, I anticipated the following ranges: Mortgage rates between 5.75% and 7.25% The 10-year yield fluctuating between 3.80% and 4.70% Mortgage rates are near the lowest levels of the year because the labor data has gotten softer and the Fed was forced to cut rates. As you can see in the chart below, the 10-year yield is close to the year-to-date lows; this wasn't the case last year at this time."
December is slow for housing but provides forward-looking indicators for early 2026. A rapid home-sales crash in late 2022 reversed when mortgage rates fell toward 6%, producing 12 weeks of positive forward-looking data and a large sales increase in February 2023. Forecast ranges include mortgage rates 5.75%–7.25% and the 10-year yield 3.80%–4.70%. Current mortgage rates sit near yearly lows after softer labor data and Fed rate cuts. If the 10-year yield remains near 4% in December, mortgage rates should be lower entering 2026 than in 2024–2025. The December Fed meeting and Fed hawkishness can push yields higher, adding uncertainty.
Read at www.housingwire.com
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