How Economic Policies and Inflation Are Reshaping the Housing Market

Jean Bergnaum II
Published Feb 14, 2025

How Economic Policies and Inflation Are Reshaping the Housing Market

Mortgage rates remain high, with the 30-year fixed rate at around 7%, up from 6.08% in September.


The Federal Reserve’s decision to keep its benchmark rate steady—due to persistent inflation—has prevented a significant drop.

With no Fed meeting until March, many wonder if rates will ease in February.
 

What’s Influencing Mortgage Rates?

While the Fed plays a major role, other factors impact mortgage rates:

  • Inflation – Higher inflation keeps rates elevated.
  • Job Market – Strong employment numbers delay potential rate cuts.
  • 10-Year Treasury Yield – Mortgage rates often follow bond market trends.

Some analysts predict a slight decline of 0.25% in February if inflation data improves, but rates will likely remain volatile.

Government Programs That Can Help

For those struggling with high mortgage costs, federal programs offer relief:

  • FHA Loans – Low down payment and flexible credit requirements.
  • VA Loans – Competitive rates and no down payment for veterans.
  • USDA Loans – No down payment for eligible rural homebuyers.
  • Refinancing Programs – Government-backed options help homeowners lower costs.

Should You Buy Now or Wait?

  • Buying now locks in a rate and avoids rising home prices.
  • Waiting could bring lower rates, but demand may drive prices higher.

 

Looking Ahead

Experts predict rates could drop to 6.5% by late 2025, but significant reductions depend on inflation and Fed policy.

Until then, government assistance programs remain a key resource for homebuyers and homeowners.

For more information, visit the Consumer Financial Protection Bureau or check with your state’s housing authority.

Previous article: IRS $1,400 Stimulus Payment Scam Alert: Beware of these Messages Amid Rising Inflation

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