Mortgage Rates have held relatively stable for the past 3 months, near the best rates we have seen for the previous 3 years. Rates are down nearly 0.5% from this time last year.
Forecasting – the Fannie Mae & Pulsenomics Home Price Expectations Survey, which polls the top 150 US economists was released for q4. The average forecasted appreciation in 2026 was at 3% while the 30-year fix mortgage average prediction was at 5.9% The average prediction for the next 5 years is a cumulative 19.2% gain. That means if someone purchased a $500,000 home at the beginning of 2026 it is predicted to be worth $515,000 in 2027 and $596,000 after 5 years.
Fed Rate Update -as anticipated the Fed cut their Fed Funds Rate by 25bp, bringing the overnight lending rate for depository institutions down to 3.5-3.75% In the vote there were 3 dissenters, one wanting a 50bp cut and two looking for no cut. The makeup of the Fed is looking to be more Dovish (in favor of cuts) in 2026 with 3 hawks and one centrists all being replaced with relatively more dovish folks. While the current dot plot (samples where the voting members think rates will be moving forward) is pretty scattered for 2026 the median supports just one cut. That could change with a more Dovish board.
Mortgage Applications to purchase homes fell 2% last week but are up 19% year over year. Refinance applications increased 14% and are up 88% year over year.