Sotheby’s International Realty broker Jenna Stauffer joins ‘Mornings with Maria’ to explain why housing affordability will remain a hot topic in 2026 as mortgage rates remain high and assets continue to improve.
Home buyers could enter 2026 with little relief as mortgage rates fell to record lows in 2025 in the final annual report.
Freddie Mac’s latest Primary Mortgage Market Survey, released Wednesday, showed an average rating for the benchmark. 30 year fixed term loan decreased to 6.15% compared to last week’s 6.18%.
The average 30-year mortgage rate started the year at about 7%.
“After starting the year near 7%, the 30-year mortgage yield climbed to its lowest level through 2025 this week, an encouraging sign for potential homebuyers in the new year,” said Sam Khater, Freddie Mac’s chief economist.
Mortgage rates are not directly affected by the Fed’s interest rate decision but closely track the 10-year Treasury yield. The 10-year yield was up about 4.14% as of Wednesday afternoon before the New Year’s holiday.
Earlier this week, the National Association of Realtors reported November home sales rose 3.3% with gains in all US states; in the Northeast, Midwest, South and West, a sign that the market is improving.
A “For Sale” sign outside a new home under construction in Tucson, Arizona, US, Tuesday, Feb. 22, 2022. (Photographer: Rebecca Noble/Bloomberg via Getty Images/Getty Images)
Lower borrowing costs could help housing affordability, which has been a problem for the economy, and some metrics show further improvement under President Donald Trump.
Earlier this month, the Bureau of Economic Analysis released its first estimate of the third quarter of GDP, which showed that the economy grew at an annual rate of 4.3% in the three-month period covering July, August and September. That figure was higher than the expectations of economists polled by LSEG, who had estimated GDP growth at 3.3% in the third quarter.
HOME LISTING IS INTENSIFIED AS SELLERS STRUGGLE TO GET THEIR PRICE
And inflation, while above the Federal Reserve’s mandate of 2%, is falling.
The Bureau of Labor Statistics said Thursday that the consumer price index rose 0.2% in November from the previous month, and rose 2.7% year over year. Both figures were cooler than the expectations of economists polled by the LSEG, which indicated a 0.3% monthly increase and a 3.1% year-on-year figure.
FED MINUTES SHOW CENTRAL BANK’S DIFFERENCE
Still, the job market remains a wildcard with soft hiring in many sectors.
In November, employers added 64,000 jobs in November. The unemployment rate rose to 4.6% in November, the highest since September 2021.
Federal Reserve Chairman Jerome Powell testifies before the Senate Committee on Banking, Housing, and Urban Affairs during a hearing to “examine the Annual Monetary Policy Report to Congress” on Capitol Hill on June 25, 2025 in Washington, D.C. (Kent Nishimura/Getty Images/Getty Images)
Minutes of the Federal Reserve’s December meeting showed two voting members of the Federal Open Market Committee opposed leaving rates unchanged, while one dissented in favor of a 50 basis point cut. In addition, six officials have released economic figures that suggest they oppose the cuts.
A “majority of stakeholders” voted for the cuts, while “some” of those policymakers argued that it was an appropriate forward-looking strategy that would “help stabilize the labor market” amid the recent slowdown in job creation. However, others “expressed concern that progress toward the committee’s 2% inflation target has stalled.”
The Fed cut rates by 25 basis points for the third consecutive time at its December meeting, lowering the benchmark federal funds rate to a range of 3.5% to 3.75%. The decision took place against the background of a slow labor market with inflation has risen above the Fed’s 2% target, a volatility that puts both sides of the central bank’s dual mandate at risk.
This week, Trump once again lashed out at Chairman Powell, calling him a “fool” for allowing renovations to the central bank’s headquarters to go over budget. Trump said he would name a new Fed chairman to replace Powell in January.
