January 6, 2025
Mortgage rates started the year at their highest level since early July, following the Fed’s cautious outlook on rate cuts for 2025. Despite resilient consumers and moderate economic growth, the bond market’s reaction to the Fed’s latest stance pushed rates higher in late 2024.
The housing market softened toward year-end as mortgage applications slowed, suggesting a quiet start for California home sales in 2025. However, modest growth is expected, with rates projected to decline gradually throughout the year.
Key Highlights:
- Mortgage Rates: Rates reached a six-month high, rising sharply since mid-December.
- Fed Policy: Fewer rate cuts are expected in 2025 due to resilient jobs data, sticky inflation, and policy uncertainty.
- Treasury Yields: Stabilization is emerging after recent increases; fluctuations are likely following the December jobs report.