Q1 2025 Wraps Up And Shows Promising Signs Of Growth. As the first quarter of 2025 draws to a close, several key indicators in the real estate market begin to show promising signs of growth just as the spring homebuying season ramps up according to Altos Research This Week in Real Estate. Mortgage rates have been trending downward since mid-January, providing relief to prospective homebuyers. This decline in rates, coupled with an increase in the number of homes available on the market nationally and recent sales activity is encouraging during what is traditionally the busiest time of year for the housing market. Single-family home sales increased by 2.3% compared to the same week last year, marking the first instance in 2025 where weekly home sales have surpassed those of 2024. Inventory levels are also showing significant growth, with the available inventory of unsold single-family homes being 30% higher than at this time last year. Furthermore, new single-family listings last week increased by 15.5% compared to the same period last year. This surge can be attributed to homeowners who had postponed selling their properties due to historically low mortgage rates now returning to the market. Freddie Mac reported that the average 30-year fixed-rate mortgage for March was 6.65%, reflecting a 19-basis point decrease from February’s average of 6.84% and a 31-basis point decrease from January’s average of 6.96%. Below are key events from the fourth week of March impacting our business:
MORTGAGE RATES EXPECTED TO MOVE LOWER IN 2025 AND 2026. Mortgage rates are now expected to end 2025 and 2026 at 6.3 percent and 6.2 percent, respectively, downward revisions of three-tenths for each, according to the March 2025 commentary from the Fannie Mae Economic and Strategic Research Group. “We expect the recent pullback in mortgage rates will provide a small boost to home sales this year,” said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. “While our latest forecast calls for a period of modestly slower economic growth, historically, interest rates have been the most important driver of home sales. We think mortgage rates will move even lower within the next quarter and ultimately close the year at approximately 6.3 percent, which could be low enough to generate some extra sales from any would-be buyers still waiting on the sidelines.” Read the full story here.
FEDERAL HOUSING AGENCY WILL NOT CUT FANNIE MAE AND FREDDIE MAC LOAN LIMITS. The newly confirmed director of the Federal Housing Finance Agency, Bill Pulte, who oversees mortgage giants Fannie Mae and Freddie Mac, said he will not lower the conforming loan limit, or the maximum value for the loans the two firms will buy and guarantee. That limit is calculated each year according to current home prices. It now stands at $806,500, an increase of $39,950 (or 5.2%) from 2024. “There are no plans to do anything as it relates to the conforming loan limit,” Pulte said Tuesday. Read the full story here.
WEEKLY PENDING HOME SALES FINALLY EXCEED 2024. Signs are finally emerging in March that we’ve turned the corner to have some growth. The week’s pending home sales were up 4% from last week and came in 2.3% greater than the same week a year ago. That’s really the first week all year where home sales exceeded those of 2024. Mortgage rates are now below where they were last year at this time. Rates have been generally sliding slower, while last year at this time, rates were rushing to their highest point of the year. So, it is in fact fractionally more affordable to buy a home right now than last year at this time. On the supply side, there are now 668,000 single-family homes unsold on the market. That’s a substantial, nearly 2% climb for the week and also 30% greater than last year at this time. That’s a 2% gain for the second week in a row. Why is inventory rising when sales are rising? Well, we finally have some home sellers who are ready to move. This week there were 70,000 new single-family listings unsold that hit the market. That’s up 2.2% for the week and is 15.5% more than last year at this time. There were 14,000 new listings immediately sold, already in contract, so in total there were nearly 9% more sellers than the same week a year ago. Read the full story here.
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