Mortgage rates moved slightly higher this week, as the 10-year Treasury yield remains elevated, in large part due to investor concerns over Pres. Trump's Greenland pronouncements, and how those ended up blunting the housing message expected in Davos.
The good news is rates are still well
"With the economy improving and the average 30-year fixed-rate mortgage nearly a percentage point lower than last year, more homebuyers are entering the market," said Sam Khater, Freddie Mac's chief economist, in a press release. "Buyers always should shop around for the best rate, as multiple quotes can potentially save them thousands."
The 30-year FRM averaged 6.09% on Jan. 22,
Meanwhile, the 15-year FRM gained 6 basis points to 5.44%, versus 5.38% for Jan. 15. It is still 72 basis points lower than the 6.16% posted on Jan. 23, 2025.
What happened with 10-year Treasury yields this week
Twice this week, the 10-year Treasury yield broke over 4.3% before pulling back. Still, at 4.27% as of 11 a.m. on Thursday morning, it is 11 basis points higher than its close seven days ago.
Lender Price data posted on the National Mortgage News website put the 30-year FRM at 6.4%. This was down by 4 basis points from Tuesday morning just as Pres. Trump was
However, Optimal Blue, another product and pricing engine, had the conforming 30-year at 6.1% for Jan. 20, compared with 6.01% for Jan. 15. But its data for the 30-year jumbo was at 6.37%, up from 6.35% over the same time frame.
How mortgage rates whipsawed in the past two weeks
Kara Ng, Zillow senior economist anticipated muted movement in the Freddie Mac report. Rates first fell sharply because of the MBS buy, as the markets priced in additional demand being created.
"That decline was partially offset the following week, as rising geopolitical tensions triggered a sell-off in the bond market, pushing both Treasury yields and mortgage rates higher," Ng wrote in a Jan. 21 comment. "The first event lowered the spread between mortgage rates and treasury yields, whereas the second event raised yields across the board."
While rates should continue to gradually descend to 6% by the end of this year, "policy shocks could sway that forecast," Ng warned.
The Mortgage Bankers Association's
The impact on home sales
Those lower rates "have boosted borrower demand, with both refinance and purchase applications up solidly on both a weekly and an annual basis," MBA President and CEO Bob Broeksmit said in a Thursday morning commentary. "With the spring home buying season approaching, lower mortgage rates would be a welcome development for households looking to buy a home."
While noting December's pending home sales numbers were disappointing, Sam Williamson, senior economist at First American Financial added that between holidays, time off and winter weather, it is a tough month to gauge market conditions.
"For now, we remain cautiously optimistic that the recent pullback in rates and cooling price growth will support a more constructive year ahead for home buyers — driven more by 'life happens' events such as job changes, marriages, and growing families than by further declines in mortgage rates."
In commenting on its primary market of Texas, HomesUSA Ben Caballero said the pending sales data was worrisome.
"Days on Market remain elevated, signaling many buyers remain cautious, even when builders buy down buyer mortgage rates, " Caballero said in a press release. "What happens with mortgage rates early in the new year will be crucial to drive new home sales higher throughout Texas."
