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By Jeff Walton & Kelly Guest
It was a high point that mortgage rates ended 2025 at their lowest level all year. Enthusiasm isn’t necessarily overflowing at the moment, but we got some good news out of rivals homes.com and realtor.com about consumer financial health and down payment savings times. If you want to relive last year from the standpoint of policies and events that affected the industry, HW has a great roundup. Otherwise, the InGeniusly Speaking team wishes you an exciting, profitable new year!
Table of Contents
CHATTER
HousingWire’s Logan Mohtashami released his 2026 market forecast, but his take on how the events in Venezuela will affect mortgage rates in their Subscriber Digest are worth noting:
“Typically, geopolitical events would trigger a flight to safety, meaning money goes into the dollar and U.S. bonds, which would pull mortgage rates lower," Logan said. "However, these types of events in the last few years haven’t prompted the traditional market responses so I don’t expect this weekend’s action to have too much impact on mortgage rates, as long as there is no escalation to this concluded event.
“However, there could be an impact if the U.S. removes its military blockade so more oil can come to market. In the longer run, if you can get more production of oil, that’s disinflationary, not inflationary. That would be very positive for the U.S. economy and the U.S. housing market. We’ll see how markets react tonight when trading begins.”
Professor Lobs a Big One
Georgetown Prof Pokes Zillow, Releases Paper Saying Their “Loans are More Expensive.” The research paper came out in the wake of 2 lawsuits alleging Zillow engages in deceptive lending practices.
First Federal Bank and Fidelity Bank, jointly announced today that they have signed a definitive agreement for First Federal to acquire Fidelity's mortgage division, NOLA Lending Group.
Is It Time for FHA to Ease Up?
FHA Annual Statement to Congress: MMI Looks Great
FY 2025’s performance represents the 11th consecutive year the fund has surpassed the statutory capital threshold:
“With the Mutual Mortgage Insurance Fund holding a very high capital reserve of 11.47%—well above the 2% statutory minimum—we will review the report in greater detail to assess whether any policy changes are warranted to improve affordability and access to homeownership in 2026, including a potential reduction in FHA’s annual mortgage insurance premiums. Any such changes should be calibrated responsibly and informed by a careful evaluation of the program and the economic factors behind the rising serious delinquency rate to ensure the program remains safe, sound, and sustainable." – Bob Broeksmit, CMB – MBA President & CEO
Buyer Prep Time Shrinking?
Getting In Getting Easier? realtor.com Down Payment Saving Time Analysis
· The report says down payment saving timeline has shortened from a peak of 12 years in 2022 to approximately seven years in 2025.
· However, the current saving time is still double compared to pre-pandemic levels, influenced by lower personal savings rates and rising down payment amounts.
MOVING & SHAKING
Alexandra Brinton joined MBA as Vice President, Chief Financial Officer (CFO).
NFM Lending appointed LaTasha Waddy President and Bob Tyson as CEO (HW).
Sagent appointed Chris Marshall CEO.
Kristine LaVigna was named President/CEO of ICBA CRA Solutions/USI Alliance.
MARKET/INDUSTRY
Mortgage Rates Drop to Lowest Level in 2025: Freddie 1-1-26
Bill Bodnar lays out a trifecta of good things for the industry as we head into the new year in his latest Master the Markets segment: We finished '25 with mortgage rate lows, pending home sales were the highest in 3 years and energy prices were down. Get ready for a flurry of reports and some subsequent fed chatter.
Mortgage Applications Decreased 5.0% from One Week Earlier: MBA Weekly Survey for the week ending 12-19-25. [Last available info]
Interesting to note that refi apps leading up to Christmas week were up 110% and purchase apps were up 16% YOY.
1-2 Punch is Less Lethal
Affordability Hits 3-Year High: First American
Housing affordability improved year over year for the 8th consecutive month in October 2025, reaching its best level since the summer of 2022. While that’s a welcome milestone, affordability remains more than 64 percent below the pre-pandemic five-year average—but the trend is durably heading in the right direction. The one-two punch that did the most damage to affordability after the pandemic—rapid house price appreciation followed by a sharp run-up in mortgage rates—has lost its force.
“Keep an eye on months’ supply—it regulates temperature of house prices.” – 1st Am Chief Econ Mark Fleming.
Slow Roll: S&P Cotality Case-Shiller Index 10-25
The S&P Cotality Case-Shiller U.S. National Home Price NSA Index posted a 1.4% annual gain for October, up from a 1.3% rise in the previous month.
Regional divergence persists as Midwestern and Northeastern markets, led by Chicago (5.8%) and New York (5.0%), outpaced Sun Belt cities like Tampa (–4.2%) and Phoenix (–1.5%).
“October’s data show the housing market settling into a much slower gear, with the National Composite Index up only about 1.4% year over year – among the weakest performances since mid-2023. This figure is essentially unchanged from September’s 1.3% annual gain and represents less than a third of the 5.1% average home price increase recorded in 2024. National home prices also continue to lag consumer inflation, as October’s CPI is estimated around 3.1% (based on a provisional index the U.S. Treasury announced due to the federal data shutdown) – roughly 1.8 percentage points higher than the latest housing appreciation. In real terms, that gap implies a slight decline in inflation-adjusted home values over the past year.” Nicholas Godec, CFA, CAIA, CIPM, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices.
Up Across the Board: NAR PHS 11-25
Month Over Month
3.3% increase in pending home sales
Gains in all four regions
Year Over Year
2.6% increase in pending home sales
Gains in all four regions
"Homebuyer momentum is building. The data shows the strongest performance of the year after accounting for seasonal factors, and the best performance in nearly three years, dating back to February 2023. Improving housing affordability–driven by lower mortgage rates and wage growth rising faster than home prices–is helping buyers test the market. More inventory choices compared to last year are also attracting more buyers to the market." - NAR Chief Economist Lawrence Yun.
Upbeat Indicators: Homes.com 2026 Outlook
Some of the good news:
Disposable personal income has grown significantly more than inflation, at 5.7% per year over the past three years.
According to Federal Reserve data, as of Q325, total household debt service amounted to 11.2% of household income.
Personal debt payment requirements are currently quite low. They are at levels not seen since the 1980s and 1990s mostly because people have paid down their debt. According to Federal Reserve data, as of the third quarter of 2025, total household debt service amounted to 11.2% of household income.
The not-so-good news – DTI:
Fannie’s Forecast - December 2025
