How Lower Rates, Policy Moves, and Regional Laws Are Changing Home buying Right Now

Rates drift into the mid to upper fives as MBS demand rises and Fed leadership shifts set the stage for further easing. Inventory grows unevenly, while new rules in New York and Massachusetts change timelines and tactics, creating a narrow window for smart buyers, sellers, and refi's.

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Transcript

Market Update And Rate Outlook

SPEAKER_00 0:35

Right, everyone. It is January 12th, 2026. Welcome to your Monday market update. Nikki, what do we have this week?

Why MBS Purchases Lower Rates

Fed Leadership And Rate Path

Refinance Opportunities Emerging

Inventory Trends And Regional Imbalance

Northeast Constraints: COPA And Inspections

SPEAKER_01 0:44

Well, this week we are definitely seeing improvement in mortgage interest rates as a result of last week, and some things with mortgage backed securities and Powell being investigated from the administration. So I'll kind of get into that a little bit, but we are seeing mortgage interest rates into the mid to upper fives now, sometimes into the low sixes, depending on your situation, but definitely a push downward in mortgage interest rates. So two things that have contributed to that is first and foremost, Trump announcing that he's directing the government to buy$200 billion in mortgage backed securities. Now, why this is important is when mortgage backed securities are purchased, mortgage interest rates it has the opposite effect on mortgage interest rates. That tenure treasury will go down. So therefore, mortgage interest rates will go down. The reason, the suspected reason that Trump did this is because he was wanting an additional cut from the Fed interest rate to help keep help keep lowering the mortgage interest rates, but he didn't get it. So instead he said, okay, instead of that, let's buy these mortgage-backed securities and keep helping those interest rates lower. Beyond that, he also obviously started, as we've all heard, the investigation into Powell and the amount of money that he spent on redoing the offices, the Fed offices, and whether that money needed to actually go towards that and if there were any misappropriation of funds. So Powell is going to be out of his position in a few months here. And so we are going to be seeing a new Fed chair come in. And it is expected to be someone that has a more of an aggressive approach to lowering that Fed interest rate. So as the year goes on, it's expected that mortgage interest rates are going to be lowering. Ideally, we'd like to see them, you know, in that mid-5 range, you know, consistently. That would be ideal. That's when people psychologically can start to think about owning homes and what that looks like and really get a good idea on, you know, more of an affordable mortgage payment. So it's not only lowering those mortgage interest rates, but it's also allowing people to find resources to be able to save money for down payment or have grant money or something of that nature. So there's a lot of things that need to be solved before that home home affordability improves. But right now it is mainly about getting those interest rates down to make sure that people feel comfortable. Anyone that purchased homes in the last two years should really, really, really start to look at refinance and take that pretty seriously. Because I'm, for example, I just quoted today 5.625% on a refinance. So it is possible to get down that far. It is possible to be able to have a good situation, get into that mid-five range, even on a refinance. So that's really important to know. Also, I wanted to talk about home sales. Um, there were a couple more statistics that um had come out from realtor.com, and I'm just gonna read some of the stuff from the article. Um, basically, inventory levels have been rising across the country. However, it's really uneven across the country. So that's important to note. Active listings are up 12% year over year, but they are still down 5.5% compared to pre-pandemic levels. And even with that, the population has grown by 12 million people. So you can kind of see where we still have not enough inventory for people that have the potential to purchase homes. That coupled with higher interest rates is why we're seeing that pre-pandemic, you know, the comparison to the pre-pandemic level be so low. And also most of the inventory growth, in fact, 30% of the total active listings are coming out of Texas and Florida right now. The states with higher inventory levels compared to pre-pandemic are seeing obviously the most pricing pressure. So, in other words, you know, 30% of the total active listings are in Florida and California, or Florida and Texas, I'm sorry. And that's where you're seeing you can get a you know home for not as expensive as it was pre-pandemic. So that's that's really interesting as well. The states that are seeing the 40 to 60 percent of lower inventory are the Northeast and Mid-Atlantic states. Part of that is being affected by the new Copa laws in New York. I don't know if anyone is aware of those, if you've seen them in the media. So basically, New York has passed, New City in particular has passed a law that is requiring current homeowners, if they want to sell their home, they need to offer that home first to the government entities and to nonprofit organizations to make a bid on that home. Once that is done, if the homeowner does not want to take that bid, they can reject it and then go into the open market. Once they sell in the open market, if they have an independent buyer, an individual buyer that comes in and makes an offer, they have to then take that offer and basically ask the government or the nonprofit agencies if they want to buy it at that price. If the government agencies or the nonprofit says, no, we're not going to pay for it at that price, then they can sell to the individual buyer. But the big trick is that the government and nonprofit organizations have 120 days to respond to any offer that is made back to them, any counteroffer that is made back to them. So this just lengthens the amount of real estate time for any sale in New York City right now and the surrounding areas. And it is a huge hot button, as I'm sure you can imagine, in the housing industry in New York. Couple that with Massachusetts just passed a law that states that for any residential transaction that is sold either to a company or to an individual. So, in other words, any real estate transaction in the entire state of Massachusetts now requires a home inspection. There is no option, there is no bidding for a home without inspection, there is no taking the home as is. It has to have an inspection. So, therefore, there's obviously home inspectors are now going, getting overrun with the amount of inspections that they have to complete. And therefore, it's taking longer to sell homes in Massachusetts as well. So, in that corridor, some really key law changes that have affected real estate and how people buy and sell properties overall. So it's really interesting to watch those things, especially, you know, even I'm very familiar with the Florida and the Texas market. So to have so many listings in Florida and Texas makes absolute sense. And it's just really uneven throughout the United States as far as what is happening from how many listings are happening, when, you know, how many buyers do we have in the market, et cetera. So it is, yes, it is about mortgage interest rates, but it also has to do with affordability and people being able to want to transact on home purchases.

Buyer Demand Sensitivity To Rate Moves

SPEAKER_00 7:05

Yeah. So for anyone watching this that's not knowledgeable or understanding why that's happening in the northeast mid-Alantic part of the country, why is the government stepping in and doing that as phase one? What can we do with it?

SPEAKER_01 7:23

It has to do with the change in administration in New York, particularly and the what's been on the agenda as a result of that. So the agenda that's been put forth by Mamdami and the and the associates is really what's affecting that the Copa right now.

SPEAKER_00 7:39

Got it. Okay. Perfect. And then as you were talking and opened up with the interest rate, I wanted to go back because it's been a hot minute since we've talked about how many buyers enter the market when rates go down half or a full percent. And I'd love to talk about that since we have seen this dip and we're going into the spring market.

Agent Playbook: Outreach And Lead Gen

SPEAKER_01 8:00

Yeah, and I can't remember the exact number on it, but I want to say it was like for every 1%, I think it was 5 million eligible new buyers. Yeah. So if you really think about that as we go into this spring market, like you said, if we can get the favorable, you know, if the administration does buy that$200 billion worth of mortgage-backed securities that the that Trump is asking them to do, that will actually help interest rates by about a quarter percent. Um, so for every$200 billion, it's about a quarter percent in interest rates, which will help. Obviously, when the Fed lowers the interest rate, it's not an exact science as to how much it it lowers interest rates overall, but it's usually in between an eighth and a quarter. So, you know, all taking these steps in the next coming months into this free market is going to be super important because it's going to really impact what those mortgage interest rates are and really impact the demand. Anyone who's been sitting on the fence, you know, I did hear a couple people talking about how right before COVID hit and the pandemic happened, anyone that was able to purchase a home in that like beginning to mid-2020 really lucked out as far as price goes and as far as interest rate, because they were able to buy at a low price before all that you know crazy demand and appreciation happened and refinance later to a lower interest rate, but still have the equity in their home. That was that was really cool to kind of see like people, oh, good, you bought at a right time. There's a lot of people that believe that that's happening again right now, where they're saying, hey, it's the beginning of 2026. We can see the indicators of those mortgage interest rates going down, which means that we can see the indicators of the house prices or the demand going up. So if you're buying between now and let's call it June into that spring market, you're gonna be able to get a really good price right now.

SPEAKER_00 9:46

Yeah. Well, and I think it's something to mention and and stay in front of the people that are on the fence on both sides, listing and buying, because it's a lot of people again haven't wanted to move because of their interest rate. But as we've talked about before, even people in the 7%, you know, it's not going to be three, but around five to six, you know, if they're already at seven or eight or high sixes, even if they have had a life event where it's a baby, they've they've just been staying where they're at just because it makes sense, but they're not happy. This is the time to talk with them, especially if they want to make a move, and also buyers on the fence. So that's why, Nikki, again, appreciate you showing up here because it's so important that us as agents really understand this so that we can go into our data bank. It's not your database, it's your data bank because there's money there waiting, and find these people and reach out and be the authority and be the person that can educate and show them the way. So I love that.

SPEAKER_01 10:52

And imagine if you called everyone that purchased a home in you know, 23, 24, 25, if you call those people out of let's call it 50 transactions, and you might get somebody who's ready to move out of those 50 transactions. And even if you're calling for the purpose of saying, hey, have you talked to your lender about refinancing your interest rate? You may hear from people saying, Well, I don't really want to refinance because it's going to cost me too much. We're planning on moving in a year anyway. Great, awesome. Well, look, you just produced a lead, you know, things of that nature. So it is important to make those calls, even if it isn't vital right now. You're bringing value and then it could result in a future transaction.

SPEAKER_00 11:29

Yeah, I always say, and that's perfect. And if they're looking or talking about refinancing, getting over to Nikki right away so that she can talk more about that. But it's and it's about staying top of mind. I would say, Nikki, if I sold you a house in October, this was past October, it's more than likely you're not going to be making a move or refinancing anytime soon. However, as agents, we need to be top of mind and the source and the resource that they come to anything real estate related. Because Nikki, you on average and any single person that you've helped on average knows 250 to 600 people. So by us staying top of mind and in front of our pet, our active clients, our inactive clients. So I was on a training where they said, don't say past clients. They're your clients, they're just inactive right now. So in your inactive clients that aren't going to be transitioning anytime soon, who do they know? So that we stay in top front of them. We're calling them, we're sending them things of value, doing these market updates. Uh, so that Nikki, when you're out to coffee this Saturday and Joanne mentions that her son's lease is up in September, my name is the first name that pops into your mind because I am top of mine. And that is where we need to stay in front of our inactive clients and the prospects and our sphere of influence so that anytime anyone in their world mentions anything real estate related, if your name is not the first name that pops into their mind, you have work to do.

SPEAKER_01 13:07

Yeah, absolutely. Absolutely.

Social Sharing And Weekly CTA

SPEAKER_00 13:10

Wonderful. Well, as usual, thank you so much. This was uh they're all jam-packed. You never, this is never a waste of anyone's time to listen to this information. And again, Nikki is very active on social media and allows us as agents to stitch, duet, rip off, rinse, repeat, whatever, anything she's done. So, Nikki, where do we find you?

SPEAKER_01 13:33

You can find me on TikTok and Instagram at mortgages from Mn to A Z, and then also on Facebook under my name, Nikki Erickson or under Kevnik Mortgage.

SPEAKER_00 13:42

Perfect. And of all the agents that I helped with their 2026 business plan, every single one of them had social media. And a lot of them were like, I just don't know what to do, or where do I find content? You find content coming to or listening to this call. So if you're watching the replay from whichever platform, whether it's YouTube, social media, the podcast, subscribe, like, share, comment, and get hit the bell so you can be notified every Monday when we put this out. If you can't make these lives, because there are just they're jam-packed. And Nikki, again, so grateful for you. This is always so impactful. And I learn a lot, and I know agents do as well. So we appreciate you.

SPEAKER_01 14:22

I I'm happy. I can I'm happy to do it.

SPEAKER_00 14:25

Yeah, all right. We'll see y'all next week and make it a good one.