February 14, 2025
VIDEO TRANSCRIPT:
- I’m Danielle Hale, Chief Economist at Realtor.com®. As romance and valentines warm hearts, I’m going to cover the latest data on inflation and mortgage rates, homebuying sentiment and housing inventory, and what it means for you. I’ll also highlight some of the hottest housing markets in the U.S.
- Consumer price data in January showed that inflation picked up for a third month. The monthly jump in prices was the highest since August 2023 while annual inflation was at an 8-month high.
- The producer price index–a measure of wholesale prices–similarly ticked higher, and while energy and food prices were important drivers, core inflation also rose.
- One relatively bright spot was shelter inflation, which declined year-over-year despite a larger monthly increase. Coupled with low unemployment, this data means that the Fed will be patient as it calibrates policy to hit its full-employment and price stability mandates. In fact, markets have pushed odds of any additional Fed rate cuts out to the 4th quarter.
- Following the hotter inflation data, 10-year yields climbed, but still remain below mid-January’s highs. While mortgage rates declined for a fourth week in a row, they are likely to climb next week as markets fully digest inflation data.
- Already, fewer consumers expected additional mortgage rate declines this year, a drag on home purchase sentiment. However, home purchase sentiment rose from last month and last year on positive signals from consumers who reported more job security & income growth, positive attitudes toward buying and selling, and expectations of home price increases that offset mortgage rate concerns.
- Realtor.com weekly housing data showed a bit of a rebound in seller activity with new listings growth back in double-digit territory. This is helping to propel slow and steady growth in availability of for-sale homes even as the time on market gap shrank. Buyers will not only have more home options, with more of them freshly listed, they are likely to find somewhat lower asking prices and have a bit more time to make decisions–all buyer-friendly factors as we inch closer to the busy homebuying season.
- Finally, the Realtor.com Hottest Housing Markets report shows that while Manchester-NH just outside of Boston continues to top the list of hot markets where demand outpaces supply, Philadelphia, PA has more than a Super Bowl victory to celebrate. The housing market that’s home to the Eagles was the biggest climber among the 40-largest metros in January meaning the market has improved for Philly’s home sellers.
- You can find all the details, including full reports and our housing data for download, at realtor.com/research. You can also follow us on X (formerly twitter) for real time updates. And instagram for graphics.
Subscribe to our mailing list to receive monthly updates and notifications on the latest data and research.