Video

January 17, 2025

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January 17, 2025

Tired of Waiting on the Sidelines?

Market Update

Coming Soon

There's significant progress on the horizon this week, especially for those looking to buy a home.

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First, let’s talk about rates. It’s been a positive week overall. While mortgage rates remain above 7%—so there’s no cause for celebration just yet—there’s good news: rates actually ticked down this week. This shift happened because inflation numbers came in better than Wall Street expected. Interestingly, inflation itself actually increased.

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The Consumer Price Index (CPI) rose slightly, from 2.7% to 2.9%. That’s the headline figure. Meanwhile, the core CPI—the metric that excludes volatile items like food and energy—dropped from 3.3% to 3.2%. Although still above the 2% target, this marks incremental progress.

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Why does this matter? Inflation is calculated on a rolling 12-month basis, meaning last year’s numbers drop off and are replaced by this year’s figures. An unusually low inflation reading dropped off, so the shift was anticipated.

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Looking ahead to the first quarter, higher inflation numbers from early 2023 will be replaced, which could help drive inflation—and potentially mortgage rates—down further.

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Now let’s zoom out. Rates are just one piece of the puzzle. The real story this week is homebuyer momentum.

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In recent days, there is a growing sentiment of buyers being tired of paying rent, covering a landlord’s mortgage, and watching home prices rise while waiting on the sidelines.

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It’s clear that many are ready to own a home and take advantage of the opportunities in today’s market.

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Here’s the key takeaway: more and more buyers are starting to recognize three critical truths:

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1. Home values aren’t in a bubble. Prices aren’t crashing anytime soon.

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2. Rates won’t suddenly plummet. While a gradual decline is anticipated, waiting for the magical 5% rate is neither realistic nor practical. Many are coming to terms with this.

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3. The current market offers opportunities. Sellers are motivated, and with homes spending more time on the market, buyers have a real chance to negotiate lower prices or secure seller-paid closing costs. These benefits can make a significant difference in the journey to homeownership.

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The current market is as close to a buyer’s market as it has been in a long time, but this window likely won’t stay open forever. As rates ease—little by little—more buyers will jump in, increasing competition.

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That’s why it’s important to get pre-approved now to be prepared for opportunities in 2025. The market rewards action, and being ready can make all the difference in achieving the goal of homeownership.