Barry Habib Shares 2025 Market Outlook & Strategies for Current Buyers

Since the September Federal Reserve meeting which gave us the first cut to the Federal Funds Rate in more than 4 years, the housing market has been moving. Bookended by a 0.50% cut in September and a 0.25% cut on November 7th, we’ve seen a plethora of conflicting economic data, a tight election that will see the balance of power shift greatly, and mortgage rates that shot from the high 5% range to nearly 7%.

With so much in flux and plenty of questions about where mortgage rates are heading in 2025, UMortgage partnered with Barry Habib, CEO of MBS Highway, to share insider expertise with our Loan Originators and enable them to help their clients and agents navigate next year’s market with ease.

Where are Mortgage Rates Heading in 2025?

To understand where mortgage rates are going in the new year, we first need to take a look at where mortgage rates currently sit and the events that got us here. In September 2024, the Federal Reserve cut the Federal Funds Rate by 0.50%—marking the first Fed rate cut since March 2020. The week of that meeting, rates sat in a range between 5.8% and 6.2%.

Since then, we’ve had an array of labor market and inflation data that indicate a strong U.S. economy and a presidential election; this data made mortgage rates rise to, as of November 13th, the high 6% range. On November 7th, the Fed cut rates by another 0.25%.

Speaking to UMortgage LOs shortly after the news of this 0.25% cut broke, Habib said, “Based upon what we see from the Fed, they might continue cutting maybe another 0.25% in December. But next year, they anticipate another 1% to 1.25% in cuts. That's going to filter its way into the 10-year treasury, and as the 10-year treasury declines, mortgage rates will decline.”

Is Now a Good Time to Buy a Home?

The first question that most prospective homebuyers ask as they prepare to buy a home is, “is now a good time to buy?” Habib emphasized that, in today’s market, answering this question requires a clear understanding of rate trends, inventory constraints, and broader market conditions.

While it might sound most sensible to wait until rates drop to buy a home, it could actually benefit many homebuyers to buy now while demand remains relatively subdued.

“[As mortgage rates drop], we think that a buyer’s investment in their home is probably very sound,” continued Habib. “You have a lot more demand when rates go down. In the tight inventory environment, that typically means prices go up.”

The S&P Case-Shiller National Home Price Index indicated that home prices increased by an average of 4.5% from 2023 to 2024. While rates might currently be higher than desired, buying now could help clients lock in the property they want in a market where home values will appreciate even faster with demand compounding with the standard rate of home price appreciation.

And when rates come down in the coming year, they can work with their UMortgage Loan Originator to refinance to that lower rate that they identified after closing the initial mortgage and enjoy the benefits of equity and appreciation while increased demand drives prices higher.

So, if you’re a homebuyer who’s financially ready to buy a home and comfortable paying the quoted monthly mortgage payment, the best time to buy is likely right now!

Anticipating Market Trends by Working With an Expert Loan Originator

Prospective homebuyers shouldn’t need a background in economics and a subscription to the Wall Street Journal to buy when the time is right. That’s why, in a market shaped by shifting rates, tight inventory, and rising demand, working with a knowledgeable Loan Originator is invaluable.

Choosing to buy a home with a UMortgage Loan Originator provides homebuyers with value that extends far beyond their initial home purchase. They’ll receive a trusted mortgage advisor who will be proactive to help them maximize the investment they’ve made in their home, save money when mortgage rates drop, and build generational wealth through real estate.

UMortgage has LOs licensed from coast to coast and based in a town near you to provide guidance specific to your homeownership goals. With an expansive portfolio of lenders to get you the lowest rate, thorough knowledge of loan guidelines for specific loans like VA loans and more, and a dedication to providing you with a mortgage that prioritizes your needs first, there’s never been a better time to start your homebuying process. Follow this link and fill out the form to connect with an LO near you!