With the spring home-buying season now in full swing, there’s encouraging news for the housing and mortgage markets. Borrowing costs are easing, and inventories are picking up momentum, setting a promising tone for buyers. The 30-year fixed-rate mortgage has recently fallen from just over 7% in mid-January to 6.65%. For a typical mortgage, this drop translates to savings of hundreds of dollars per month, depending on loan size. Lower costs could entice first-time buyers and homeowners looking to upgrade to act, especially now that spring—the peak season for real estate—has arrived.
Looking ahead, forecasts suggest home borrowing costs will trend slightly lower but won’t approach the ultra-low rates of 2020 and early 2021. The current consensus predicts 30-year fixed rates will hover between 6% and 7% through much of 2025, with little chance of dipping into the 5% range unless a significant economic downturn occurs.
On the inventory front, options are growing. Nationally, the number of single-family homes for sale reached 682,000 in mid-December 2024, a nearly 27% increase from the previous year. By mid-March 2025, that figure climbed to 656,000, up 29% year-over-year. However, despite this uptick, inventories remain historically low. At the end of February, the supply stood at 3.5 months at the current sales pace—unchanged from January and up from 3.0 months in February 2024—but still below the 4–6 months considered a balanced market.
The bottom line: More housing supply is still the elephant in the room. The steady upward trend in inventory throughout 2024 and into early 2025 signals progress, offering spring buyers more choices than in recent years. As blossoms bloom and open houses multiply, this season could be the perfect time for buyers to find their ideal home—provided they navigate the still-tight market wisely.
Source: Mortgage Market Guide
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