How much lower can the mortgage interest rate fit with all this drama?

There are optimistic expectations for some for a potential recovery in the second quarter, because improved weather conditions and more clarity with regard to trade negotiations can come to play. Nevertheless, if the economic indicators further soften and weaken the labor data, my lower reach of the 2025 prediction is in play

As we discussed more than a month ago, the range of 4.15% to 4.18% for the 10-year yield becomes a crucial obstacle that is not easily surpassed. Looking ahead, we must check economic indicators, in particular labor data. The mortgage interest has become as low as 6.64%, but have not been able to break this year.

All signs of weakness of the labor market will attract the attention of the Fed and Bond Markets. This week we have a Job Week and Liberation Day and we come close to testing that level again. If there was a time to close under 4.18% and by buying bonds, this week has the variables to do this and push the mortgage interest lower.

Mortgage spreads

The current housing market benefits from positive improvements in mortgage spreads from 2024. These spreads usually vary between 1.60% and 1.80%. If we were still dealing with the peak mortgage spread levels from 2023, we would look at mortgage interest that is 0.77% higher than we have today. It is encouraging to see how things have shifted!

Conversely, if the spreads were comparable to what we normally perceive, our current mortgage interest could be reduced by around 0.73% to 0.83%. Imagine – if those spreads return to normal, today we could see the mortgage interest almost 6%.

For 2025 I expect a modest decrease in the mortgage spreads, around 0.27% to 0.41%, with the average of 2.54% working that we saw in 2024. We have been reached a few times almost this year, but are not there yet.

Application -Buy data

Last year, as the mortgage interest rose from 6.63% to around 7.50%, the purchase request data was mainly 18 weeks negative, with 14 weeks of negative details from week to week and only two positive and two flat prints. We also had zero growth prints on an annual basis.

2025 has been very different. Here are the weekly data for 2025:

• 5 positive lectures
• 3 Negative measurements
• 3 PLAT PRINTS

In general, in most weekly data in 2025 we saw a positive growth in 2025. Last week we saw 7% on an annual basis growth. The low bar that took place in 2024 gave us room for growth on an annual basis; The compositions become more difficult in the second half of 2025. The details of the purchase applications look out for about 30 to 90 days, but I would not say that the question is robust, just grow from a low basis. I have spoken about this in detail about the Last episode From the Daily Podcast of the Woningwire.

Weekly total pending sale

The last weekly total current contract details of Altos Offers valuable insights into current trends in the demand for homes. Usually a mortgage interest rate is needed to get closer to 6% trends to get real growth in the data lines of the housing demand, but we recently saw some pick-up on the weekly data with rates that are still higher than 6.64%, as you can see in the graph below.

Weekly current contracts for the past week in recent years:

• 2025: 357,799
• 2024: 367.520
• 2023: 335.017

Weekly inventory data

Spring has arrived and the traditional increase in active mentions heralds – a timely opportunity for our annual storage boost. It is encouraging to see that the housing market brings remarkable progress in the direction of a more balanced level of active inventory. Although we still have to reach the inventory levels in 2019, the progress observed so far is committed. Last week still marked a positive development in the inventory.

• Weekly inventory change (March 21, March 28): Inventory Rose van 668,155 Unpleasant 675.558
• The same week last year (March 22, March): Inventory Rose van 512.759 Unpleasant 517,355
• The soil of all time was in 2022 240,497
• The stock peak before 2024 was 739,434
• For some context were active lists for the same week in 2015 985,411

New frame data

Although the growth of new offers fell last week, this year looks brighter than both 2023 and 2024. Looking back, I initially expected that we would achieve at least 80,000 offers during the top season weeks in 2024. Although I fell with 5,000, this indicates that we were not far away. After a challenging start of this year, we are finally making progress in the direction of achieving that important milestone of 80,000 lists during the seasonal peak period.

To give you some perspective, during the years of the bubble crash of the house, new entries have been rising between 250,000 and 400,000 a week for many years. The growth in new list data that we are now seeing is just trying to get normal again, where the season peaks vary between 80,000 and 110,000 a week.

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

• 2025: 67,854
• 2024: 59,854
• 2023: 48,442

Price percentage

In an average year, about a third of all houses experience a price reduction, which clearly illustrates the natural fluctuations on the housing market. With rising stock levels and persistent high mortgage interest rate, the percentage of houses that price reductions are undergoing has noticeably increased compared to periods of lower rates.

For the rest of 2025 I confidently project a modest increase in house prices by around 1.77%. Although this suggests another year of negative growth in the home prize, the current availability of houses and increased mortgage interest are back. A significant shift in the mortgage interest to around 6% could change this process. My 2024 prediction of 2.33% turned out to be overly optimistic, because lower rates made my prediction too low in 2024.

The higher percentage of price reduction this year compared to the last reinforces my conviction that my conservative growth price forecast before 2025 is well substantiated. Price reductions for last week in recent years:

• 2025: 35%
• 2024: 32%
• 2023: 30%

The coming week: Trade War and Jobs Week

This week a number of interesting developments can yield, in particular with regard to President Trump, who can negotiate a deal to postpone the rates. Moreover, it is a job week and we may see some dismissal from the government that is reflected in the data. The unemployed claim data must not yet show significant cracks.

We have several important events on the economic agenda, so it is essential to monitor how the bond market reacts to these changes. Releasing various economic data and comments from Fed Presidents, Plus Jay Powell, will be released on Friday. So, prepare the popcorn, people – this week can be a wild ride that can help the mortgage interest rate lower.