First Look at January 2025 Mortgage Data
We've just updated our analysis with the latest MBS Pivot data, and for the first time, we have a glimpse into mortgage market activity in January 2025!
The headline from the chart is that despite the reduction of the Federal fund rate by a whole percentage point since September, overall, the mortgage interest rates that consumers have been paying have increased, or stayed elevated.
Chart 1: Monthly Mortgage Lending Trends January 2024-January 2025
As you can see, the loan volume bar for January 2025 is dramatically shorter compared to any month in 2024. Just 12,841 loans are currently reported for January 2025. This confirms what we anticipated: the data "buckets" for recent periods, particularly January 2025, are far from full.
Low Volumes for Recent Months – Data Still Catching Up
These recent figures need to be interpreted with caution. As we discussed previously, data for the most recent months in securitization pipelines is often incomplete in initial releases. Reporting lags are inherent in the process. While December 2024 loan volume also appears somewhat softer compared to earlier months, January 2025 is exceptionally low in this initial snapshot. We fully expect these numbers, especially for January 2025, to be revised upwards in subsequent updates as more data is reported.
January 2025 Median Rate: Echoes of Early 2024?
Interestingly, despite the extremely low volume, the median interest rate for January 2025 is reported at 6.6%. Take a closer look at the chart – you’ll notice this is precisely the same median rate we saw in January 2024!
Is this an early indication of rates stabilizing around levels seen at the beginning of last year? It’s tempting to draw conclusions, but we must temper this statement given the very small sample size for January 2025 at this point.
Looking Back at 2024: A Fuller Picture Emerges
This update, even with its preliminary 2025 data, is valuable because it solidifies our understanding of 2024. Chart 1 above visually summarizes the loan volume and median rate trends throughout last year. We observe the fluctuations in median rates and the generally moderating loan volumes in the latter part of 2024 after a period of higher activity mid-year.
Furthermore, the total agency loan volume for 2024 is approximately $1.1 Trillion. This is a significant milestone, highlighting the substantial activity within the agency mortgage market throughout the past year. This year-over-year growth in agency loan originations provides important context. Despite the interest rate fluctuations and market dynamics of 2024, the agency mortgage market demonstrated increased activity compared to 2023.
Chart 2: Agency Loan Originations Trends (2023 vs. 2024)
What’s Next?
For a comprehensive understanding, we recommend that you familiarize yourself with the agency market data, including:
- Track revisions to December 2024 and especially January 2025 loan volumes.
- Although not all of the agency data is in this month, we recommend that you analyze loan characteristics beyond volume and rate. For example, you can dive deeper into credit scores, LTVs, DTIs, and loan amounts for both December 2024 and this initial January 2025 data to identify any shifts in borrower profiles or loan risk characteristics. This analysis could be used as a benchmark for your internal January data - are you in line with the market? Are you selling what the market needs?
Remember, this is just the initial snapshot for January 2025. We'll be closely monitoring the next MBS Pivot data release for revisions and a more complete picture. Check back soon for our updated analysis as more data becomes available!
