Real Estate - Market Update March 2025

🏡 Real Estate Market Update: Why Did Mortgage Rates Fall Last Week?

_{Courtesy of NEXA Mortgage}

Last week, the Federal Reserve met — and even though they didn’t cut interest rates, mortgage rates still moved lower. If that sounds surprising, don’t worry — here’s what really happened and why it matters to homebuyers and homeowners.

📉 The Fed Didn’t Cut Rates… So Why Did They Fall?

• The Fed controls a short-term rate called the Fed Funds Rate, which affects things like credit cards and auto loans.

• But mortgage rates, especially for 30-year loans, are more influenced by long-term bond markets, like the 10-year Treasury Yield, and how investors react to Fed news.

After the Fed’s announcement last Wednesday, investors felt more confident that rate cuts are still likely later this year, which caused long-term yields — and mortgage rates — to move lower.

📊 What the Fed Said That Calmed the Market

At every few meetings, Fed officials share their personal projections for where rates are heading — this is called the “dot plot.”

• Some thought these projections would rise sharply due to recent inflation data.

• But in reality, the new projections (from March) were very similar to the ones from December.

• That small surprise gave markets relief and kept expectations of mid-year rate cuts alive.

🟠 Red = December projections
🔵 Blue = March updates

                                                                                                _{Courtesy of NEXA Mortgage}

💡 What This Means for You

• Mortgage rates fell slightly after the Fed meeting — getting closer to the lowest levels we’ve seen since last fall.

• That’s good news for buyers who are rate-sensitive.

• The move wasn’t huge, and rates could still bounce around depending on upcoming economic reports.

                                                                                                      _{Courtesy of NEXA Mortgage}

✅ Key Takeaways

• The Fed didn’t cut rates, but their tone last week helped calm markets and gave mortgage rates a boost.

• This could create a short window of opportunity for buyers before rates shift again.

• Keep an eye on key data in the next two weeks — especially the PCE inflation report and the jobs report — as they may influence whether rates continue trending lower.

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📊 Bonus Market Snapshot: Inventory & Days on Market

To round out this week’s market update, here’s a quick look at how housing inventory and Days on Market (DOM) have changed compared to a year ago:

📈 U.S. Housing Inventory (February 2025):

• Up 27.5% vs. February 2024

• More homes are available for sale — giving buyers more options.

⏳ Median Days on Market:

• 66 days, up 5 days from last year

• Homes are taking slightly longer to sell, which may signal less competition.

This trend is a positive sign for buyers who felt squeezed by low inventory in recent years — and a reminder for sellers that pricing and presentation remain key.

_{Sources:
Realtor.com February 2025 Data
National Association of Realtors
FRED Median Days on Market}