Contracts to purchase : pending home sales in the US are getting back on track after the large declines through 2022-2023
The average 30-year mortgage rate rose to 7.79% (late Oct. 2023), a level last reached in late 2000, and the downward trend, at 6.21% as of December 18, 2025, returns mortgages to the level of late December 2022
The interest rate trend reversal had stabilized in a range of 7 to 6% since October 2023
At more than double the Dec. 30 ’21 rate of 3.11%, home buyers face a storm of great magnitude – even the Volcker-driven 50% rise in rate (Aug. ’80 – Oct. ’81) does not compare
With global repricing on interest rates on a roll, exposing possibly trillions of dollars of leveraged finance, eagerness to call for a ‘pivot’ in restrictive monetary policies comes as no surprise
Anticipation remains a fool's game - seeking out signals of rate reversal seems more sensible
The business model of mortgage lenders is uniquely sensitive to rate shifts
- writing mortgages for resale to financial institutions ground to a halt as prospective homebuyers grew hesitant
- mortgage refinance at lower rates went to zero as there was little to ‘refinance’
According to Edward Seiler, Mortgage Bankers Association's Associate Vice President, Housing Economics, “With mortgage rates continuing to rise, the purchasing power of borrowers is shrinking. The median loan amount in September was $305,550 – much lower than the February peak of $340,000.”
The industry has been first to bear the brunt of rate reversal and the valuation of listed companies incl. bellwether Rocket Companies
The canary (of coalmine fame) might sing again, but not as soon as hoped or anticipated....
The industry might also be among the first to benefit from a rate pivot - check trends over very short periods such as 2 weeks, on the menu (top right)
The benchmark of the theme is iShares MBS
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