Mortgage interest remains calm for possible tariff enforcement

Last week the property data showed stability, even if we approach potential tariff processes. The mortgage interest rate has largely remained unchanged and there has been a slight decrease in the home inventory. In addition, pending contracts a modest decrease on an annual basis, while the purchase request data remained the same from week to week. At the moment it is important to check whether the important tariff plans announced by the Trump administration will be determined, something that I have discussed here.

10-year revenue and mortgage interest

My prediction of 2025 includes:

• A reach for mortgage interest between 7.25%-5.75%
• A range for the return of 10 years between 4.70%-3.80%

The return of 10 years closed the week at 4.54%. Despite the news about larger rates, we only experienced some mild volatility on Friday because of confusion about the rates. The return of 10 years increased from 4.51% to around 4.58% before he dropped some basic points in the direction of the end of the day. In reality, the mortgage interest rate did not change much last week, not even with all the news heads.

Mortgage spreads

A real blessing in the past year is that the mortgage improves and this week is still much better than the peak mortgage spreads of 2023. If we had the mortgage spreads of 2023, the mortgage interest rate today would be closer to 8% instead of almost 7% .

If we applied the worst spread levels of 2023 to today’s mortgage interest, we would see an increase of an extra 0.72%. This can lead to the headlines wondering whether mortgage interest could exceed 8%. Fortunately that is not the case. If the mortgage spreads were at their typical level, we would see the mortgage interest rates to 0.94% lower than current rates. This would reduce the mortgage interest rate almost 6%, which would undoubtedly result in a strong recovery of housing sales.

In my 2025 prediction I predicted that the average spreads would improve to between 0.27% and 0.41%, a positive reduction of the average of 2.54% in 2024. We are on schedule to achieve this target spread range and as if We can reach 0.27%- 0.41% improvement in the spreads, it will be useful when the return of 10 years drops. The most important thing to remember is that the mortgage interest rate would be much worse if the spreads would not improve in 2024 and now in 2025.

Application -Buy data

While we start the year, the data application data has shown a mild positive trend, despite increased mortgage interest. Here is a summary of the recent data:

• 2 positive lectures
• 1 flat lecture

Last week the weekly data was flat, but there was a decrease of 4% year after year. Historically, the mortgage interest rate, the details of the purchase application, reflect the tendency to display negative trends. Last year, for example, the details of the purchase request showed 14 negative measurements, 2 positive measurements and 2 flat measurements when the mortgage interest ranged between 6.75% and 7.50%.

We will keep a close eye on the data in February and we will discuss these and other economic topics in the home with our large Housing Economic Top 26 February in Dallas.

Weekly pending sales

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, mainly fed by a fall in mortgage interest rate, making buying home more affordable for many consumers. Compared to the same time frame in 2022 and 2023, the data reflects a stronger housing market in the past 12 weeks of 2024.

However, I want to note that in recent weeks we have seen negative growth on an annual basis when comparing our current figures last year. This is nothing too big, but it is a slight decline. However, the mortgage interest rate rises from 6% to 7.25%, has part of the demand from the housing market exhausted.

We still show higher growth compared to 2023 levels. This trend justifies careful monitoring, especially in February.

Weekly current contracts for the past week in recent years:

• 2025: 282,172
• 2024: 287,779
• 2023: 271,842

Weekly inventory data

The best story for me in 2024 was stock growth when we worked our way back to normal. That story continued in 2025, although we saw a slight decrease in the home inventory this week. This is very normal, and we will quickly see the seasonal soil and then the traditional seasonal increase for spring.

• Weekly inventory change (January 24-Januari. 31): Inventory fell from 636.580 Unpleasant 634,979
• The same week last year (January 26 -Feb. 2): Inventory fell from 503,192 Unpleasant 497,347
• 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 936,263

New frame data

Our 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. In the past five years we have seen the lowest activity levels in history. This year we have to reach regular new list data of more than 80,000 a week in the top season months of May, June and July. I made that phone call last year, but fall short at about 5,000 a week.

NOTE: During the house bubble crash years this data line ran between 250,000-400,000 a week. The new listing details for last week in recent years:

• 2025: 48,886
• 2024: 44,162
• 2023: 42,843

Price percentage

In an average year it is typical for about a third of all houses to experience a price reduction, which reflects the usual dynamics of the housing market. Last year I had a low prediction of only 2.33% nominal price growth, which turned out to be too low. Before 2025 I predict the growth of 1.77%this year, which indicates another year of negative growth in the home prize. If you investigate the data, it shows that the percentage of price reductions is already a soil. This trend is due to a combination of higher inventory and increased interest rates.

Price reduction percentages for last week in recent years:

• 2025: 33.09%
• 2024: 31%
• 2023: 33%

The coming week: Buckle Up, It’s Tariff and Jobs Week!

We have a busy week ahead! First, we will find out what rates are and whether they are being enforced or not. On Friday I recorded an episode of the Housingwire Daily Podcast that will be broadcast on Monday and discussed this topic.

What is even more important, it’s a job week! We have four reports that come out, culminating in the important jobs Friday report. Last week we received data about unemployed claims and the improvement showed.

This week can be much more volatile compared to last week. Don’t forget to ignore the noise until you see something in writing or in an economic report. We will be here every day this week to understand everything.