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:
Interests for the week of July 4th to July 10th remained flat. “After declining for five consecutive weeks, the 30-year fixed-rate mortgage moved slightly higher following a stronger-than-expected jobs report,” said Sam Khater, Freddie Mac’s Chief Economist. “Despite ongoing affordability challenges in the housing market, we are seeing home purchase and refinance applications respond to the downward trajectory in rates, increasing by 25% and56%, respectively, compared to the same time last year.”
Mortgage rates are expected to decline slightly in 2025 as the U.S. economy slows, although rate volatility will continue due to a handful of variables, like tariffs, tax cuts, and other aspects of President Donald Trump's economic agenda. Analysts expect the 30-year fixed mortgage rate to bounce between 6% and 7% for the next two years. However, that could change as investors continue to digest changing economic data.
Good things may come to those who wait, but patience doesn't always pay off in the housing market. In the time that home buyers have been holding out for lower rates, home values have continued to rise. Home prices have appreciated by 17% since the beginning of 2022, according to the S&P CoreLogic Case-Shiller Home Price Index – despite mortgage rates doubling in that time frame. Here are a few home price forecasts from top U.S. housing groups:
- Fannie Mae: Home prices will rise 4.1% in 2025 and 2% in 2026.
- MBA: Home prices will rise 1.3% in 2025, followed by a 0.3% rise in 2026 and 2027.
- NAR: The median home price will rise by 3% in 2025 and 4% in 2026.
- Realtor.com: Existing home sales prices will increase by 3.7% in 2025.
- Zillow: Home values will grow 2.6% in 2025.
Fed Watch: Target rate (in bps) possibilities, according to the CME Group (as of 07/10/2025 – 12:00 PM EST):
Market Review: OptimalBlue’s Production Metrics:
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Interesting Fact – Investor share of US homes:
Nearly 27% of all homes sold in the first three months of 2025 were bought by investors -- the highest share in at least five years, according to a report by real estate data provider BatchData. Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties, while those with between 6 and 10 properties account for another 5%.
News You Can Use:
• Investors snap up growing share of US homes as traditional buyers struggle to afford one
• US housing shortage grew to record 4.7M units, Zillow says
• Mortgage Applications Picked Up in June as Rates Eased
• Why Buying a Home Still Makes Sense in Today's Market: A 2025 Perspective
• Single-Family Rental Market Insights: What Investors Need to Know for 2025
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 07/10/2025, 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 Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 07/10/2025 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.
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