Market Update: Rates Trending Higher but There Are Small Glimmers of Hope

Blog posted On January 14, 2025

There have been a lot of changes in the market since our last update, so here’s the lowdown…

Mortgage rates: higher after jobs data & could inch up more this week

Mortgage rates have been trending higher since early October. Last week was no exception, with a notable upward trajectory following some strong jobs data.

A stronger jobs market generally correlates to a stronger economy and thus, higher mortgage rates. The reverse is also true (worse jobs market/economy > lower rates). This week, we have another hot report coming that could send rates trending even higher. The consumer price index (CPI), which measures inflation, is scheduled for Wednesday morning. If the numbers come in above expectations, this could mean bad news for rates. “Conversely, a sharply lower inflation reading could be worth just as much of a recovery,” writes Matthew Graham of Mortgage News Daily. Regardless of the potential rate changes, it’s important to keep in mind that these reports-based rate movements can just be temporary blips. A lot of the longer-term movement will depend on the incoming administration and any changes that will come with it.

Start of the year stats compared to 2024

So far, 2025 is off to a stronger start compared to the same time last year. Pending sales (contract signings on a house) are up 1% compared to January 2024, according to Altos Research. Inventory is also higher, up 24% from last year. Experts are also excited to potentially see more listings throughout the year.

On California wildfires…

If you’ve been affected by the wildfires in California, you might be entitled to some leeway on your mortgage payments. This largely depends on your mortgage servicer. To learn more, reach out to us for help!

Sources: HousingWire, Mortgage News Daily