HousingWire Daily
Logan Mohtashami on how many Fed rate cuts to expect in 2025
Jan 31, 2025
Logan Mohtashami, a lead analyst with expertise in mortgage rates and housing trends, delves into the future of the housing market. He discusses anticipated Fed rate cuts in 2025, driven by factors like disinflation in rents and labor market conditions. The conversation highlights how mortgage insurance changes affect affordability and home sales. Mohtashami also analyzes the interplay between pending home sales and rising rates, offering a hopeful perspective on market stabilization and the impact of inventory growth.
29:38
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Quick takeaways
- Potential Fed rate cuts in 2025 depend on economic stability, revealing the bond market's sensitivity to evolving economic data.
- Soaring insurance costs, particularly in disaster-prone regions, are significantly impacting homebuyer affordability and narrowing housing options.
Deep dives
Mortgage Rate Projections and Economic Indicators
The discussion addresses expectations surrounding Fed rate cuts, with projections indicating two cuts might occur in 2025 if the current economic conditions persist. The Fed's focus on disinflation from rents is highlighted, revealing that recent rent indices have actually shown significant deflation, which is rare. This shift indicates that inflation is not prompting further rate hikes, suggesting stability in the housing market as projections show softening in the labor market, impacting overall economic growth. However, the implication remains that the bond market remains sensitive to economic data, which complicates the forecast for mortgage rates in the context of broader financial conditions.
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