Emanuel Santa-Donato from Tomo Mortgage discussed the volatility in 30-year mortgage rates and 5-year Treasury yields, attributing it to fluctuations in fixed-income markets and policy uncertainties under the Trump administration. Recently, short-term loans like 15-year mortgages have become more expensive, reflecting market predictions of economic slowdown. Despite recent increases in newly listed homes, persistently high rates are stifling sales activity due to seller hesitance and buyer affordability concerns. Tomo forecasts rates will remain flat through 2025, with low chances for significant drops this year.
Santa-Donato noted that the fixed-income market is constantly repricing information based on the Trump administration's policies, affecting growth and inflation significantly.
According to Santa-Donato, higher Federal Open Market Committee rates contributed to the observed inverted Treasury yield curve we are experiencing currently.
He stated, stubbornly high rates will continue to impede sales activity as sellers hesitate to list, while buyers face affordability challenges in a limited market.
With 30-year fixed rates currently at 6.91%, Santa-Donato revealed that there is only a 25% chance they will decline to 6% by the year’s end.
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