Rates See Largest Weekly Decline Since September

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Rates See Largest Weekly Decline Since September. “As the spring homebuying season gets underway, the 30-year fixed-rate mortgage saw the largest weekly decline since mid-September,” said Sam Khater, Freddie Mac’s Chief EconomistThis Week in Real Estate. The average 30-year fixed-rate mortgage has decreased for seven consecutive weeks, averaging 6.63%, compared to 6.76% the previous week and 6.88% a year ago. Job growth in February was slightly below expectations but remained stable, with the unemployment rate inching up to 4.1%, according to the U.S. Labor Department’s Bureau of Labor Statistics. Since January 2021, the U.S. job market has added jobs for 50 consecutive months, marking the third-longest period of employment expansion on record. Federal Reserve Chair Jerome Powell emphasized the need for a more pronounced softening in the labor market to adjust their monetary policy approach. “The Fed will take a cautious approach as the economy continues to be in a good place. The economy is fine. It doesn’t need us to do anything, really. The U.S. labor market remains solid and broadly in balance,” Powell remarked. Below are key events from the first week of March impacting our business:  
SOLID JOB GAINS IN FEBRUARY. The U.S. job market continued to grow at a solid pace in February, with the unemployment rate edging up slightly to 4.1%. The labor market remains healthy overall, but there are signs of potential weakness in the coming months, driven by mass federal government layoffs and ongoing policy uncertainty. In February, wage growth accelerated. Year-over-year, wages grew at a 4.0% rate, down 0.1 percentage points from a year ago. Wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases. According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 151,000 in February, following a downwardly revised increase of 125,000 jobs in January. The unemployment rate rose to 4.1% in February. Meanwhile, the labor force participation rate – the proportion of the population either looking for a job or already holding a job – decreased two percentage points to 62.4%. While the overall labor force participation rate remains below its pre-pandemic levels of 63.3% at the beginning of 2020, the rate for people aged between 25 and 54 exceeds the pre-pandemic level of 83.1%. Read the full story here.
DECLINING MORTGAGE RATES FUEL HOME BUYER DEMAND. The 30-year fixed-rate mortgage, now in its seventh consecutive week of declines, posted its largest weekly drop this week since mid-September, averaging 6.63%, Freddie Mac reports. Falling mortgage rates have captured the attention of home buyers, as mortgage applications for a home purchase – a gauge of future homebuying activity – jumped 9% this week, the Mortgage Bankers Association reports. “Home buyers are in a favorable position as they encounter more inventory and improved rates ahead of a spring rush,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. Read the full story here.
WILL MORTGAGE RATES ALLOW FOR ‘PEAK’ HOMEBUYING SEASON? Over the last two months with economic uncertainty, the bond market has responded and the yield for the 10-year Treasury has declined by 60 basis points from 4.8% to 4.2%. It’s quite obvious that stubbornly high mortgage rates slowed down early season homebuyers in the first quarter of 2025. Our weekly pending home sales data continues to run about 3% below last year. This is after Q4 2024 was 5% above the year prior. That’s a pretty notable swing. Total available inventory dipped this week to 639,000 single-family homes on the market. That’s fractionally fewer than a week ago. There are 28% more homes on the market now than a year ago. New listings also dipped for the second week in a row. There were just over 53,000 new listings unsold, plus another 10,000 new listings immediate sales. That comes to 2% more unsold new listings and actually 5% fewer sellers overall than in 2024. That’s three out of the last four weeks with fewer sellers now than in 2024. This week saw the most newly pending sales all year but sales are still trailing 2024. There were just over 60,000 newly pending sales for single-family homes this week, which is up almost 7% for the week but is still 3% fewer than the same week a year ago. There are 324,000 single-family homes in contract to sell right now. That’s 3.75% more than last week and is running 3% fewer than last year at this time. The median price of those newly pending contracts came in at $389,900 this week. That’s a bump up of 1% for the week and is just 2.6% greater than a year ago. Read the full story here.


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