As we wrap up the final full week of 2025, I couldn’t help but feel some renewed optimism for this coming year. Why? Because the latest economic news has given us a very reason to feel hopeful as we head into the new year.
Between the holiday shopping and the end-of-year hustle, you might have missed a major shift in the markets. I’ve spent the morning diving into the latest reports from the Mortgage Bankers Association (MBA) and Freddie Mac to pull out the “need-to-know” details for you.
The Big Win: Inflation is Cooling
The headline news this week is a stunning decline in inflation. The November CPI report showed inflation at 2.7%—one of the lowest readings we’ve seen in years. Most importantly, “shelter costs” (which keep our housing market heavy) are finally starting to moderate.
Why does this matter to you? When inflation cools faster than the Fed expects, it takes the pressure off interest rates. While we aren’t back to the “rock-bottom” rates of years past, the 30-year fixed-rate mortgage averaged down this week. To put that in perspective, we are down a full half-percent from this time last year. That difference adds significant breathing room to a monthly budget.
Looking Toward 2026: What’s on the Horizon?
I know many of you are wondering if you should wait for the “perfect” moment. Here is the reality of the 2026 forecast:
• Rates: The MBA expects rates to stay mostly in the 6% range next year. We may see brief dips, but they don’t anticipate a slide below 6% just yet.
• Inventory & Prices: We’re seeing a “stagnation” in home prices, which is actually great news for buyers. With more inventory hitting the market and price growth slowing to around 1%, the frantic “bidding war” environment is settling into something much more manageable.
• A “Better Year” Ahead: I’m not the only one feeling hopeful. A recent survey found that 9 out of 10 mortgage professionals expect 2026 to be a growth year, driven by first-time buyers and families finally looking to refinance.
A Quick Note on the Holiday Schedule
As we move into Christmas week, the bond market (which drives mortgage rates) will be closing early or entirely. This “thin” trading can sometimes cause random, small jumps in rates. If you are mid-process or thinking of locking in a rate, let’s chat sooner rather than later to avoid any holiday volatility.
My Sincere Thanks
Whether you are a client I’ve helped move into a dream home this year, a partner I’ve collaborated with, or someone just starting to dream about your first front door—thank you. Your trust is what keeps me motivated.
I’ll be keeping a close eye on the January 9th jobs report, as that will be the next “big” mover for the markets. Until then, I hope you have a wonderful, peaceful holiday filled with warmth and family.
Happy Holidays!
