The forecast for 2025 anticipates mortgage rates between 5.75% and 7.25%, with the 10-year yield fluctuating between 3.80% and 4.70%. Recently, Fed Chairman Jerome Powell's speeches and other Fed events influenced the markets, driving down the 10-year yield to around 4.23%. This decline has positively impacted mortgage rates, which have dropped to around 6.72%. Despite challenges, mortgage spreads have improved since their peak, indicating stability in the market. Additionally, purchase application data showcases significant year-over-year growth in existing home sales, which remains misunderstood by many.
With all the Fed drama, the 10-year yield declined for the week and mortgage rates also fell, indicating a positive trend for housing data.
Historically, mortgage spreads have typically ranged between 1.60% and 1.80%, but improvement from peak levels in 2023 has benefited current mortgage rates.
The most confusing data line in America today is the purchase application data, experiencing 21 consecutive weeks of year-over-year growth.
If the spreads were as bad as they were at the peak of 2023, mortgage rates would currently be 0.65% higher than they are now.
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