Fannie Mae has revised its mortgage rate forecast, now expecting the 30-year fixed rate to average 6.5% by year-end, higher than the previously anticipated 6.2%. This change comes as inflation continues to run hotter than expected and the Federal Reserve remains cautious about cutting interest rates too quickly.
Several economic factors are influencing the updated outlook:
- Persistent core inflation is limiting the Fed’s flexibility.
- Recent tariff expansions are adding upward pressure on consumer prices and supply chains.
- Bond yields remain high, keeping mortgage rates elevated even as home sales data softens.
This signals that mortgage rate relief may be slower and more uneven than previously hoped, with temporary dips rather than a sustained downward trend.
China’s Retreat From U.S. MBS Market Raises Red Flags for Mortgage Rates
Analysts are sounding alarms over China’s ongoing reduction in U.S. mortgage-backed securities (MBS) holdings, which have declined nearly 9% year-over-year. This strategic move by China could reduce demand for MBS, which in turn may increase rates for U.S. borrowers.
What’s driving the change:
- China is reallocating reserves to domestic priorities and away from U.S. dollar-denominated debt.
- The shift is part of broader diversification away from U.S. assets due to geopolitical and economic concerns.
- Lower demand for MBS leads to higher yields, pushing up mortgage rates.
If this trend continues—and is followed by other global investors—it may limit how far and how fast U.S. mortgage rates can fall, even if the Fed begins to ease.
Berkshire Hathaway Offers Key Housing Market Insights for 2025
Warren Buffett’s Berkshire Hathaway HomeServices division has shared its latest take on the state of the housing market. While the market remains challenged by affordability and inventory, there are important behavioral and structural shifts underway that loan officers should be aware of.
Key takeaways from their report:
- Buyers are adjusting expectations. Many are opting for smaller homes, fixer-uppers, or moving farther from urban cores in search of affordability.
- Financial preparedness is essential. With tighter underwriting and elevated rates, only well-qualified buyers are moving forward.
- Patience and flexibility are key. Consumers are taking longer to shop and close, often waiting for rate dips or price reductions.
This data reinforces that buyers aren’t disappearing—they’re adapting. And smart loan officers are meeting them with education, guidance, and clarity.
Real Estate-Related Stock Performance (as of April 14, 2025)
- Zillow Group (ZG): $49.65 ▲ 1.1%
- Rocket Companies (RKT): $11.92 ▲ 0.6%
- United Wholesale Mortgage (UWMC): $6.38 ▼ 0.6%
- Lennar Corp (LEN): $105.80 ▼ 0.4%
- D.R. Horton (DHI): $92.45 ▼ 0.6%
Zillow continues to gain investor confidence through its leadership in listing transparency and consumer tools, while homebuilders dip slightly amid global uncertainty and cost concerns.
From the Loan Officer’s Perspective: Monday = Realtor Outreach
It’s Monday, which means it’s time to kick off your week with Realtor partner calls. These are the professionals who fuel your pipeline—and they need your insight and support more than ever.
With mortgage rate uncertainty, global financial shakeups, and headlines about affordability dominating the news, now is the perfect time to:
- Check in with your Realtor partners.
- Offer them updated market talking points and rate forecasts.
- Ask them who they’re working with this week that needs financing.
- Remind them that you’re available, reliable, and proactive.
If you’re not sure who to call or what to say, reach out to the Mortgage Marketing Animals. Their Daily Success Plan gives you everything you need to hit your numbers and stay top of mind with referral partners.
Remember: The market doesn’t dictate your momentum—your consistency does.