Mortgage Market Update Nov 17th, 2025: Why the Next Wave Could Be a Tailwind for You
Mortgage Market Update: Why the Next Wave Could Be a Tailwind for You
If you work in real estate—or you’re just trying to buy or refinance a home—you’ve probably felt like the last few years have been one long uphill climb. High rates, tight inventory, nervous buyers… it’s been a grind.
But based on what leading mortgage experts are watching in the data, the story going into late 2025 and early 2026 is shifting. The message:
Those who are still in the game are about to get a tailwind.
This blog breaks down what that means for:
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Realtors looking for more transactions and better conversations
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Homeowners hoping for a refinance opportunity
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Buyers wondering if they should jump in now or wait
From 400,000 Loan Officers to 175,000 – Why That Matters to You
Over the past few years, the number of mortgage originators has dropped from roughly 400,000 to around 175,000.
For consumers and Realtors, that means:
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The people still here have weathered the toughest market in a decade
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You’re more likely to be working with experienced, battle-tested pros
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As volume comes back, those pros will be in a position to move quickly and strategically
In other words: the talent pool is smaller, but stronger—and the next phase of the cycle is expected to reward that experience.
What’s Going On with the Fed and Mortgage Rates?
Any time you turn on financial news you hear: “The Fed is meeting… again.” So what does that really mean for mortgage rates?
1. Fed rate cuts are a tailwind (even if markets move early)
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When the Fed cuts short-term rates, it generally helps longer-term rates, including mortgages.
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Markets are forward-looking, so you’ll often see mortgage rates improve before the Fed officially cuts, as traders anticipate what’s coming.
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After a Fed meeting, rates can still bounce around depending on the economic data that follows—but overall, cuts are typically good news for borrowers.
2. The Fed’s balance sheet matters, too
Beyond rate cuts, there’s another powerful lever:
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The Fed has been letting its holdings of Treasuries and mortgage-backed securities (MBS) run off.
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Any pause or slowdown in that runoff tends to support bond prices and push yields—and mortgage rates—lower.
So when you hear talk about the Fed “slowing the runoff of its balance sheet,” that’s code for:
“This could help mortgage rates.”
Why Many Experts Believe Rates Can Move Below 6%
Several forces are lining up in favor of lower rates:
1. Inflation is likely lower than the headline suggests
The Fed’s preferred measure, core PCE inflation, has been running in the high-2% range—but some components are overstating it, such as:
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Tariffs – a one-time bump that shouldn’t be treated as ongoing inflation
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Owner’s Equivalent Rent (OER) – a survey-based “guess” about what homeowners think their home would rent for, which moves slowly and tends to lag reality
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Portfolio management fees – when your investments grow, the fee you pay (as a percentage) might be the same, but the dollar amount goes up. The government counts that as “inflation,” even though it’s not the same as higher prices at the grocery store.
When you strip out some of that noise, many analysts believe true inflation is closer to 2%—right where the Fed wants it.
2. The labor market is softening
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Big employers (including major tech companies) are cutting jobs or slowing hiring.
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AI is eliminating or reshaping roles across industries.
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A softer labor market gives the Fed more cover to cut rates without worrying as much about overheating the economy.
3. New demand for Treasuries could help push yields down
Two technical but important developments:
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Stablecoins & the “Genius Act” – As stablecoins (digital currencies backed by safe assets) grow, they need to be backed by short-term Treasuries. That creates more demand for Treasuries and can help keep yields in check.
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Bank capital rule changes – If banks are allowed to hold Treasuries without taking as heavy a capital hit, they can buy more government debt, again supporting demand and putting downward pressure on yields.
4. The spread between the 10-year Treasury and mortgage rates is narrowing
Recently, mortgage rates have been unusually high compared to the 10-year Treasury yield. As markets calm down and liquidity improves, that spread can compress, pulling mortgage rates lower even if Treasury yields don’t drop dramatically.
Put together, industry experts believe:
In the next 6–12 months, high-5% mortgage rates (think 5.5%–5.875%) are a realistic possibility if the trends above continue.
What Lower Rates Mean: A Massive Refinance Opportunity
Data provider ICE has estimated that if mortgage rates hit around 6%, it could unlock roughly 5 million refinance-eligible loans—defined as:
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At least 0.75% lower than their current rate
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Reasonable equity (loan-to-value ratios)
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Solid credit (for example, 720+ scores)
For context:
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In all of 2024, the market only completed around 1.2–1.3 million refinances.
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That means there’s a huge pool of homeowners who could benefit from a refinance but haven’t had the chance yet.
For homeowners, that might translate into:
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Lower monthly payments
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The ability to drop mortgage insurance (MI) with improved equity
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Consolidation of higher-interest debts into a more manageable payment
For Realtors, it’s a chance to:
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Reconnect with past clients who may now be ready to move up or right-size
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Position yourself as the “go-to” resource who understands both the purchase and refi sides of the conversation
What Lower Rates Mean for the Housing Market
We’ve had years of pent-up demand:
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The U.S. typically averages around 1.8 million household formations per year.
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That number fell closer to 1.2 million as higher rates and affordability issues slowed things down.
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Builders adjusted, pulling back production to around that 1.2 million level.
If rates fall and buyers come back faster than builders can ramp up:
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Demand rises quickly
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Supply lags behind
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Prices can begin to appreciate more quickly again
For buyers, that means there is a window of opportunity:
Buy while rates are still a bit higher and competition is lower—then refinance later if/when rates drop.
The old phrase still applies:
“Marry the home, date the rate.”
Over the last 2½ years, many buyers who took that approach have seen:
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Double-digit appreciation in some markets
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Equity gains that more than offset the cost of a future refinance
Action Plan for Realtors
If you’re an agent, here’s how to turn this market into momentum:
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Call your database now
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Talk about when it makes sense for them to refinance or move—not just if.
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Define a “strike rate” with your lender partners
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Work together to set a specific rate at which it makes financial sense to refinance each client.
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Look for MI and equity opportunities
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Pair a potential rate drop with a shift from 95% to 80–85% LTV to remove or significantly reduce mortgage insurance.
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Educate on appreciation potential
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Help buyers understand that when rates fall and demand surges, today’s prices may look cheap in hindsight.
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This is the time to plant the seeds—so when rates move, you and your clients are ready, not scrambling.
Action Plan for Homebuyers & Homeowners
If you’re a consumer reading this, here’s how to prepare:
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Talk to a loan officer now, not later
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Get a clear picture of your budget, your credit, and your “strike rate.”
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If you’re thinking about buying, start the process
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Explore what you can afford today, not based on fear of current rates but based on long-term plans.
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If you’re a homeowner, ask about equity and MI
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You may be closer than you think to crossing a key loan-to-value threshold.
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Get your financial house in order
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Pay down high-interest debt where possible
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Avoid big new obligations right before applying for a mortgage or refi
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When the opportunity window opens, the people who prepared ahead of time will move first—and often get the best terms.
Final Thoughts: Don’t Miss the Next Wave
The last few years have tested everyone—Realtors, lenders, buyers, and homeowners. But underneath the headlines, the data is starting to tell a different story:
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Strong potential for meaningful rate improvement within the next 6–12 months
If you’re still in the business—or still in the market as a homeowner or buyer—you’ve already survived the hard part. Now is the time to:
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Get educated
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Get organized
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Get positioned for the next phase of the cycle
Because when rates drop and activity picks up, you don’t want to just participate—you want to be ready to lead the way.
About Between Two Doors
Between Two Doors is a podcast where I talk with Realtors about their journey, aiming to connect home buyers and sellers with agents on a more personal level. I ask "right brain" questions that go beyond transactions, focusing on the experiences, values, and passions that make these professionals great at what they do.
Listen to more episodes at: https://www.betweentwodoors.com
Sponsored by:
Premier Lending, Inc.
https://www.natecarver.com
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Licensed by the Department of Financial Protection and Innovation (DFPI). Equal Housing Opportunity.
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Contact: 972-832-5761
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