🏡 June 16 Mortgage & Housing Market Update

Stay ahead of the trends in real estate finance with this month’s key insights on mortgage rates, housing inventory, new construction, and major policy moves from the Fed and GSEs.

📉 Mortgage Rate Trend: Easing but Elevated

The 30-year fixed mortgage rate continues to hover around 6.84%, showing a slight decline from the previous week. Meanwhile, the 15-year and 5/1 ARM are averaging 5.98–6.26%, reflecting modest downward movement.

🏠 Housing Inventory & Prices: More Homes, Balanced Market

• • Inventory levels are up, with the number of new listings rising steadily since early spring.

  • The market has flipped: There are now more sellers than buyers, creating increased competition among sellers.

  • New home prices have dropped slightly year-over-year (approx. 7.5%), while existing home prices are climbing slowly (~2.8% YoY).

  • Forecasts predict 3–4% price growth into 2026, with a soft landing rather than a crash.

  Key Insight: A more balanced market is emerging, providing negotiable space for buyers and moderate appreciation for owners.

🏗 New Construction: Slowing Momentum, Still Strong

• After a rebound in 2024, single-family housing starts are expected to decline slightly in 2025.

• Builders are managing rising material costs and buyer hesitancy tied to interest rates.

• Some developers are offering incentives like rate buy-downs or upgrades to entice buyers.

Key Insight: While new construction remains a key supply channel, developers are adjusting strategies amid softening margins.

🏛 Federal Reserve: Holding Pattern with Political Pressure

• The Federal Reserve has chosen to hold interest rates steady, awaiting clearer inflation and labor market data.

• With inflation moderating and job growth slowing, future rate cuts remain possible but not imminent.

• Political rhetoric is heating up, with some calling for aggressive rate cuts to stimulate housing and consumer credit.

• Key Insight: Expect stable Fed policy through summer, but market expectations could shift with upcoming inflation reports.

🏢 Fannie Mae & Freddie Mac: Policy and Leadership Changes

• New leadership at the FHFA has brought internal restructuring and paused several buyer assistance programs.

• Discussions are reigniting around privatizing Fannie Mae and Freddie Mac, which could affect mortgage pricing and risk dynamics.

• Both agencies have conducted credit-risk transfers, signaling proactive management of lending exposure.

Key Insight: These GSEs remain central to the market, but future policy shifts could alter their roles in lending and affordability programs.

🔮 Market Forecasts: What’s Next?

• Mortgage rates are projected to drift down gradually, potentially reaching 6.1% by late 2025 and below 6% in 2026.

• Home prices are expected to rise modestly—by 3.2% nationally in 2025, according to consensus forecasts.

• Refinancing activity is forecasted to increase slightly in the second half of 2025, driven by softening rates.

Key Insight: The outlook is steady and cautiously optimistic. Refinancers may benefit before buyers do.

💬 Final Thoughts

• The mortgage and housing market in mid-2025 is characterized by resilience, rebalancing, and realism. Rates remain high, but inventory is improving. Prices are steady. Builders and buyers alike are adjusting to new norms. The Fed is watching closely, and Fannie & Freddie are facing reforms that could shape mortgage accessibility for years to come.