March 31 2025

Reef Daily

Reef Daily | March 31 2025

Housing Market Update

Latest Market Data (March 31, 2025) The latest mortgage rate data shows stability in the market, with the 30-year fixed mortgage rate averaging 6.65% for the week ending March 27, down slightly from 6.67% the previous week. Sam Khater, Freddie Mac's chief economist, noted: "Recent mortgage rate stability continues to benefit potential buyers this spring, as reflected in the uptick in purchase applications". This slight improvement in rates could be encouraging for buyers who have been hesitant to enter the market due to affordability concerns.

Mortgage Rates

Current rates as of March 31, 2025:

Type	Today's Rate	Last Week's Rate
30-year fixed	6.75%	6.68%
15-year fixed	6.02%	5.91%
5/1 ARM	6.05%	5.95%

Future Forecasts Goldman Sachs has revised its interest rate outlook, now projecting three consecutive Fed rate cuts in 2025—in July, September, and November. This forecast adjustment comes as the bank raised its estimate of U.S. recession probability to 35% (up from 20% previously), citing concerns about the economic impact of potential tariff policies. Goldman pulled its lone 2026 cut forward into 2025, leaving its terminal rate forecast for the Fed Funds rate unchanged at 3.50-3.75%.

Notable Transactions

Commercial Highlights Rocket Companies announced today it will acquire home loan service provider Mr Cooper Group for $9.4 billion. This marks Rocket's second major acquisition this month, following its purchase of real estate listing service Redfin for $1.75 billion. The Mr Cooper acquisition will add nearly 7 million customers to Rocket's portfolio and is expected to generate significant operational efficiencies. Following the transaction, Jay Bray, CEO of Mr Cooper, will take over as head of Rocket Mortgage, the company's core business.

Market Indicators

Economic Outlook Goldman Sachs has significantly increased its U.S. recession probability to 35%, up from its previous estimate of 20%. The bank cited "lower growth baseline, sharp recent deterioration in household and business confidence, and statements from White House officials indicating greater willingness to tolerate near-term economic weakness" as reasons for the adjusted forecast. Goldman has also raised its year-end 2025 unemployment rate forecast to 4.5% and its core PCE inflation forecast to 3.5% year-on-year, while lowering its 2025 GDP growth forecast to 1.0%.

Regional Developments

Policy Changes Affecting Mortgage Eligibility In a significant policy shift announced within the past 24 hours, the USDA has declared that non-permanent residents will no longer qualify for their mortgage programs, effective immediately. Similarly, FHA/HUD announced that non-permanent residents will be ineligible for insured mortgages on case numbers assigned from May 25, 2025, onward. This change is expected to affect hundreds of thousands of potential homebuyers and may have ripple effects throughout the real estate sector, potentially reducing the pool of eligible buyers in certain markets.

Sources

This newsletter is for informational purposes only and should not be considered as financial advice.