This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Market Commentary:
Interest rates for the week of May 9th to May 15th increased slightly. The April Consumer Price Index (CPI) showed that year-over-year inflation grew at its slowest pace since February 2021. Slower inflation is a sign that the Federal Reserve could cut the rate at its next meeting. However, housing costs made up most of the month-over-month inflation increase. This mixture of good and bad inflation news has led to unstable mortgage rates. “The news for the week was the growth in purchase applications,” said Michael Fratantoni, chief economist for the MBA. Applications for a mortgage to purchase a home rose 2% for the week and were 18% higher than they were the year before. That was the second straight weekly gain after demand fell sharply for most of April. The previous week they rose by 11%.
Rates Forecasts:
Fannie Mae: Predicts 30-year mortgage rates will end 2025 at 6.3% and 6.2% in 2026.
Mortgage Bankers Association (MBA): Forecasts rates to be around 6.7% by the end of 2025 and 6.6% in 2026, according to US News & World Report.
National Association of Realtors (NAR): Projects 30-year rates at 6.4% in 2025 and 6.1% in 2026, according to Forbes.
Wells Fargo: Anticipates the average 30-year fixed interest rate to settle at 6.35% in Q2 2025, according to The Mortgage Reports.
Fed Watch: Target rate (in bps) possibilities, according to the CME Group (as of 05/15/2025 – 12:00 PM EST):
Market Review: Optimal Blue’s Production Metrics:
News You Can Use
- Mortgage demand from homebuyers continues to recover, even with higher interest rates
- Warren Buffett's Berkshire Hathaway predicts major housing market change soon
- Home values flatten as sellers outnumber buyers
- Morgan Stanley predicts major mortgage rate changes are coming soon
- Speech by Vice Chair Jefferson on the economic outlook - Federal Reserve Board
- As student loan default rate spikes, some borrowers face ‘grave
- House Republicans advance Trump’s tax bill — but ‘SALT’ deduction still undecided
- Student Loan Delinquencies Are Back, and Credit Scores Take a Tumble
- Household Debt and Credit
Interest rate and annual percentage rate (APR) are based on current market conditions as of 05/15/2025, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by HomeServices Lending, LLC. Not available in all states. Rate is as of 05/15/2025 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
.png)
