Mortgage Update - March 17th, 2025
Happy St. Patrick’s Day! 🍀
Today is extra special—not only is it St. Patrick’s Day, but it’s also my little Ruby’s 1st birthday! Luck is definitely in the air!
We’ve got a packed newsletter and a big week ahead. We’re closely watching the Fed, mortgage rate trends, and how recent mergers could impact your business. So, grab a green drink and let’s dive into what you need to know to stay ahead in this market! ☘️🏡
We are posting regular content to Instagram (Nick | Kreg) and Facebook (Nick | Kreg) to help you and your buyers stay informed. Be sure to follow us!
Read time: ~4 minutes
Inflation Is Falling—So Why Aren’t Mortgage Rates Dropping?
Last week, we made progress with two key inflation reports:
✅ CPI (YoY): 2.8% (vs. 2.9% expected)
✅ PPI (YoY): 3.2% (vs. 3.3% expected)
So, if inflation is improving, why did mortgage rates increase this week? The reality is that while inflation is slowing, it hasn’t dropped enough for the Fed to cut rates anytime soon. The Fed’s target is 2%, and we’re still above that threshold.
On top of that, trade policy uncertainty—like tariffs on Canadian and Mexican imports—could drive prices and in return, inflation higher. Some homebuilders are already factoring in $7,500–$10,000 price increases.
With all this uncertainty, investors remain cautious, keeping mortgage rates higher and making the housing market’s direction harder to predict this spring. Don't expect to see any dramatic drop in interest rates if the markets are continually surprised by policy decisions.
Oh, and egg prices should improve soon 🍳
Key Takeaway: Despite last week’s drop in inflation, mortgage rates still increased. Investors are more focused on the potential impact of Trump’s tariffs on future inflation rather than the current data. Rates move based on expectations, not just present conditions. As long as the risk of a tariff war remains, mortgage rates are likely to stay elevated.
Rocket + Redfin: What This Means for 🫵
Rocket Mortgage’s $1.75 billion acquisition of Redfin is set to shake up the real estate industry, creating a one-stop shop for home buying, selling, and financing. While they promise a smoother process for consumers, the real question is—how does this impact independent mortgage loan officers and agents like us?
Increased Competition: Independent agents and brokers will feel the pressure as Rocket-Redfin leverages its massive marketing budget and tech-driven ecosystem to capture more market share. Competing against a multi-billion-dollar machine definitely won’t be easy.
Changes for Redfin Agents: While Redfin’s salaried agents may see more leads, Rocket will likely tweak commission structures—probably not in their favor. Before considering a switch, think about what those changes could mean for your long-term future.
How to Stay Competitive: The key is doubling down on what these giants can’t replicate—personal relationships, hyper-local expertise, and customized service. If you haven’t already, now is the time to adapt! Leverage modern tech like CRMs, virtual tours, and online marketing to streamline your business. Build strong partnerships with local lenders and service providers to create a high-touch, Rocket-like experience on a personal scale. At the end of the day, let’s be honest—we know we can deliver better service than 99% of those Rocket/Redfin employees anyways! 🙂
Key Takeaway: The Rocket + Redfin merger is just the beginning. More industry shakeups are coming as commission structures tighten and companies struggle to stay afloat. Instead of worrying about what’s next, focus on positioning yourself for long-term success. Stay informed, adapt, and take control of your future in this ever-changing market!
🚨 Check Your Clients’ Student Loans! 🚨
In nearly three years of writing this newsletter, we’ve rarely covered the same topic back-to-back. But the student loan crisis demands everyone's attention!
Last week, Nick mentioned that federal student loans are now reporting to credit bureaus again—and it’s hitting borrowers hard. This weekend, I had a client who was house-hunting four months ago reach out to update his pre-approval. After running a soft credit check, his score had dropped from 781 to 639!
What happened? Student loans.
His loan came out of deferment without his knowledge, and after missing payments for over 60 days, his score plummeted by 142 points! He went from being a perfect Conventional buyer to needing FHA financing.
This is a major reason why we need to check in with past clients and ensure their pre-approvals are still valid. We’re seeing this happen constantly—don’t let it catch your buyers off guard! 🚨
🔥 It’s Fed Week! 🔥
The Fed’s next meeting is Wednesday, March 19th, and the market is watching closely. Here’s what the CME FedWatch Tool predicts for rate cuts:
March Decision Projection
✅ 98% chance of no change
✅ 2% chance of a 0.25% rate cut
May Decision Projection
✅ 71.8% chance of no change
✅ 27.7% chance of a 0.25% rate cut
✅ 0.5% chance of a 0.50% rate cut
Bottom line? A rate cut in the near future is highly unlikely. Instead, the focus will be on Jerome Powell’s speech, where investors will analyze his tone for any clues about future rate moves. Depending on what he says, we could see big market reactions—so stay tuned! 📊👀
Join Us For March Madness - March 20th
Realtor friends, it’s tournament time, and we’re kicking off the madness in style! Join us at Lower.com Field on Thursday, March 20th, from 11 AM - 6 PM for a full day of hoops, food, drinks, and giveaways! 🎉
Come hang out, catch the first round of the college basketball tournament on the big screens, and enjoy the action from the Lower.com Lounge. Whether you stay for a game or just drop in for a drink, it’s the perfect way to celebrate the big dance with great company!
RSVP now and let’s get the brackets rolling! 🏀🍻