Can job reductions from the government lead to a lower mortgage interest rate for spring?

Could the loss of jobs in the government sector and the withdrawal of financing by the economy considerably increase the unemployment rate and an increase in unemployed claims? If this happens, shall we see lower mortgage interest this spring?

It is an intriguing idea, especially considering how this fits in with Strategy of the White House Civil servants To stimulate the labor supply, to reduce the total demand and possibly lower the return of 10 years.

I have submitted myself for a while and I have taken a deep dive in this recent episode of the Housingwire Daily Podcast. The actions of the government influence the livelihood of many Americans – not only by redirecting federal employees, but also by reducing the financing that will lead to more jobs being lost. It feels like a broader game plan is playing here, worth exploring while we navigate together because of these economic changes.

10-year revenue and mortgage interest

In my forecast of 2025 I expect the following series:

• The mortgage interest is between 5.75% and 7.25%
• The return of 10 years will fluctuate between 3.80% and 4.70%

Until now we have been a prediction at the top of the year in 2025. Last week, however, a decrease in mortgage interest rate as a result of softer economic data, which led to an influx of money into the bond market as shares that were sold on Friday. Since 2022, when the mortgage interest rate has approached 6%, this is because the bond market is concerned about the economy that is trying.

Currently, with the available economic data, the 10-year return and FED policy is released reasonably well. However, the bond market may be that if the unemployment rate increases, in particular with unemployed claims that increase as a result of the government’s dismissal and more negative effects of less money circulating in the economy, we can see more money flowing in bonds, returns and returns Mortgage interest rate steer lower.

We must be more aware of the labor data as we continue to 2025. Every year millions of people are dismissed from the private sector. However, if we focus on government employees and government contractors, it is likely that the unemployment rate will increase in 2025. This increase can be the Federal Reserve‘s Target limit of 4.3%.

The White House is looking for a lower return of 10 years and the bond market has been for the FED in the past when it smells an economic growth shell, this has led the return of 10 years and the mortgage interest rate lower. As you can see in the graph below, we are 36 basic points lower than the peak of what we saw on January 14.

Now let’s look at the rest of the data that affects the housing market.

Mortgage spreads

The housing market would have a much different conversation today if the mortgage spreads were not improved in 2024 and now in 2025.

Historically, these spreads vary between 1.60% and 1.80%. If we experienced the worst mortgage spreads of 2023, the mortgage interest rate would be 0.77% higher today. Conversely, the current mortgage interest would be 0.73% to 0.83% lower if the spreads were normal. If we had historically normal spreads today, we would have 6% mortgage interest, so we don’t even need too much help from the return of 10 years if that is the case.

For 2025, however, I am only looking for an improvement of 0.27% -0.41% compared to the mortgage spreads with an average of 2.54% level from 2024. So we are not far from the prediction that is affected. The trick is those levels for the whole year.

Application -Buy data

Application data has so far been somewhat negative:

• 2 positive lectures
• 1 flat lecture
• 3 Negative reading

Last week the weekly data had fallen by 6% weekly, but by 7% year after year. In the past two weeks we have had better data on an annual basis with purchase apps, even with unfavorable weekly reports. Last year, when the rates varied between 6.75% and 7.50%, the purchasing application data showed 14 negative, two positive and two flat measurements.

We will follow the data closely in February and discuss these and other economic topics in the home with our large Housing Economic Top on 26 February in Dallas.

Weekly pending sale

The last weekly current contract details of Altos Research Offers valuable insights into current trends in the demand for homes. This dataset has shown a remarkable improvement since the summer of 2024 and towards the end of the year.

However, because the mortgage interest rate started to rise late in 2024 and was increased by 2025, it has facilitated a slight decrease in the turnover year after year from where we had grown. We still show higher growth compared to 2023 levels, but not much. Our housing data improves when the mortgage interest rate is almost 6%, so we are not there yet before 2025 and spring is correct on the door.

Weekly current contracts for the past week in recent years:

• 2025: 312.742
• 2024: 325,054
• 2023: 310,134

Weekly inventory data

The best story for housing has and will always be the housing stock growth that works from the historically low level that we saw in 2022. We are about to get the seasonal increase in the inventory; Hopefully in the coming years we can come back to the inventory at historically normal levels as a nation instead of there are only eight states there. Last week showed a mild week of stock growth.

• Weekly stock change (14 February 21 February): Inventory came out 637,991 Unpleasant 640.221
• The same week last year (February 16, February 23): Inventaris was released 493,987 Unpleasant 497,657
• The soil of all time was in 2022 240,497
• The stock peak before 2024 was 739,434
• For some context, active lists for the same week in 2015 were 958,304

New frame data

The new listing data from Altos Research reflects houses that come on the market without an immediate contract, which gives us a real -time picture of every sales pressure in the market. The two lowest new list data in history were the two lowest new list, and they were not healthy years for the new list data.

Last year I predicted that we would get at least 80,000 new lists per week during the seasonal peak months, but it didn’t happen. This year I think we should hit that goal. Note that this data line ran between 250,000 and 400,000 a week during the bubble crash years of the home.

The national new list data for last week in recent years:

• 2025: 53,861
• 2024: 51,387
• 2023: 44,864

Price percentage

In an average year, about a third of all houses usually experience a price reduction, which reflects the usual dynamics of the housing market. As the inventory increases and the mortgage interest rate remains increased, the price reduction percentage data is higher than if the rates were lower.

For 2025 I predict the growth of the home price of 1.77%, indicating another year of negative growth in the home prize. As the inventory increases and the mortgage interest rate remains increased, the negative growth of the home price should be in the making before 2025. The price reduction percentage data increased earlier this year than in other years, so my current prediction looks intact. If the rates fall in the future, we can visit the weekly data again.

Price percentages for last week in recent years:

• 2025: 33%
• 2024: 30%
• 2023: 31%

The coming week: Fed Speeches, PCE inflation report, house price data and more

This week we have a few Fed presidents who speak and Logan of the Dallas Fed, who speaks on Tuesday, can offer an interesting day of quotes. We also have some bond auctions, house price data and sustainable goods. We will be alert for the rest of the year to see if the dismissal of the government and the future money that is included from the economy have an overflow effect of increasing unemployed claim data. Last week we saw an increase above the estimates.

This week the most important inflation report of the Federal Reserve, PCE, will also be released. The PCE inflation report has been adapted to demonstrate slightly lower inflation levels than people delivered earlier in the month. However, observing how the bond market responds to this report will be necessary, especially in view of the current labor market news.