I hope your week is off to a wonderful start. I’m here with my second cup of coffee, looking over the latest market data, and I felt it was the perfect time to check in. Between the global headlines and the shifting landscape here at home, there is a lot to digest as we head into February.
We are seeing some stubborn resistance in interest rates, but there is also a lot of underlying strength and opportunity if you know where to look.
What’s Moving the Needle?
Last week, we saw rates edge up slightly. While global fears regarding Greenland subsided after a new cooperation framework was reached, the real “jolt” actually came from Japan.
It might seem far away, but when Japanese government bond yields spike (as they did recently to levels not seen since 1998), it ripples over to us. Investors start demanding higher yields everywhere, which puts upward pressure on our own US Treasuries. Closer to home, our economy remains incredibly resilient. US GDP growth clocked in at a strong 4.4 percent, driven largely by the private sector. While a strong economy is great news for the country, it does give the Federal Reserve a reason to be cautious about cutting rates too quickly.
The “6% Crossover” and Current Rates
We reached a fascinating milestone this month. For the first time since the pandemic, the number of homeowners with mortgage rates above 6 percent has officially surpassed those with rates below 3 percent.
What does this mean for you? It means the “rate lock-in” effect is slowly starting to thaw. More people are moving, life changes are happening, and the market is gradually resetting. Currently, according to Freddie Mac, the average 30-year fixed-rate mortgage sits slightly above 6 percent. While that’s a tiny bit higher than last week, remember that at this time last year, we were looking at nearly 7 percent. We are in a much better position today!
Looking Ahead
All eyes are on the Federal Reserve meeting this week. We usually see three reactions: the initial “knee-jerk” to the written statement, the volatility during the press conference, and finally, the “sober second thought” the following day. I’ll be watching closely to see if the 10-year Treasury note can dip back below the 4.2 percent mark—that’s the magic number we need to see for mortgage rates to improve meaningfully.
Whether you are looking to buy, thinking of selling, or just want to know what your home equity looks like in this new “6 percent crossover” era, I am here to help. I care about your financial well-being, and I’m always happy to run the numbers for you. You’re always welcome to send me an email; your message comes directly to me, or call/text me directly at 818.307.6072.
