The article discusses the forecast for mortgage rates and the bond market in 2025. It predicts mortgage rates will range from 5.75% to 7.25%, with the 10-year yield fluctuating between 3.80% and 4.70%. Current rates are influenced by economic factors, including trade tensions. A stable economy could lead to higher mortgage rates, indicating that good economic health is paradoxically unfavorable for mortgage borrowers. The impact of the Godzilla tariffs on the bond market has created volatility, but improvements in mortgage spreads may help keep rates within expected 2025 levels.
If the economy is not headed for a downturn, considering current Federal Reserve policy, mortgage rates could remain elevated, ranging between 6.75% and 7.25% in 2025.
The 10-year Treasury yield has dropped significantly in recent years when the bond market anticipates a weakening economy, often in anticipation of Federal Reserve rate cuts.
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