Monthly RUNdown – January 2026! See below for our major headlines from the last month and reach out with any questions.
1) Mortgage Rates Hit Multi-Year LowsMortgage rates have moved lower in the last month on the back of the Fed’s potential quantitative easing and continued disappointing job data. Is AI taking all our jobs for good? TBD! But you could definitely have AI read you this email while you drive/walk today.The 30-year fixed mortgage rate sits around 6.1% today. Last week, rates touched 6.01%, the lowest level in over three years.If your mortgage is in the high 6%s or 7%s, let’s talk about refinancing. You could be saving thousands of dollars per year and using that money on a fun vacation instead!
Here's a one-year view of rates. We're almost exactly 1% lower than last January, with most of that decline happening since August.
2) Fed Ends 2025 With Another Rate CutIn December, the Federal Reserve cut the benchmark interest rate by 25 basis points. This was the third consecutive rate cut in 2025, reflecting their ongoing efforts to support economic growth amid cooling. Despite the December cut, the Fed’s tone has been cautious about further cuts in 2026. Some Fed policymakers warned that the economy’s relative strength and stubborn price pressures complicate calls for further cuts. These comments highlight ongoing internal debate between easing rates to support growth and guarding the Fed’s inflation-control desires. Projections still show one to two rate cuts this year, but uncertainty remains high as we balance inflation resurgence with disappointing job data.
3) Trump vs. PowellPresident Trump recently said the government would begin buying mortgage bonds again in an effort to push interest rates lower, drawing comparisons to the Fed’s past quantitative easing programs (2008 recession, COVID). Trump’s plans are to have Fannie Mae and Freddie Mac purchase up to roughly $200 billion in mortgage-backed securities to increase demand and reduce mortgage rates. While Trump framed this as a way to quickly improve housing affordability, it is not an official Federal Reserve action and does not mean the Fed has to restart bond buying. Rates dropped significantly last week following Trump’s statement, but many analysts think this dip will not last. Concerns around political pressure on monetary policy generally push bond yields higher rather than lower. Adding to the complication, a DOJ investigation into Fed Chair Powell began this week. 99% of experts in the space are proponents of Fed independence, so this action was viewed negatively. This increased rates by 5-10 bps. The newest Trump vs. Powell episode shows how non-economic events can quickly influence interest rates and predicting the year ahead is nearly impossible.
4) Aren’t 10-year treasury and Mortgage Rates correlated?Not today, junior! Mortgage rates are generally set by the 10-year treasury plus a spread. Spreads usually remain consistent, so we pay attention to the 10-year treasury closer. 10-year treasuries are actually up this month, but recently we’ve seen some tightening in the spreads being charged. The buying activity which Trump requested from the government-sponsored enterprises like Fannie Mae and Freddie Mac has been the catalyst to tighten spreads. While this spread tightening explains why mortgage rates have dropped, experts caution that spreads can fluctuate quickly.
If you know someone that needs a refi, send them my way and I'll send you a nice gift (hint: a gift card to my favorite store... COSTCO!). Everyone wins!
Monthly RUNdown - December 1, 2025
