Payden & Rygel: US real estate - 30-year fixed mortgage rate versus home sales

Payden & Rygel: US real estate - 30-year fixed mortgage rate versus home sales

January 19, 2026

Real Estate United States
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Last week, the national average 30-year fixed mortgage rate fell to its lowest level since September 2022

The decline, however, is not due to renewed rate-cut hopes but rather to the President's announcement of a $200-billion mortgage-purchase program through Fannie Mae and Freddie Mac. While lower mortgage rates can support housing activity, as seen in house sales finally rising in October, the policy's impact on housing affordability will likely be limited.

  • First, Fannie and Freddie have already been buying mortgages.
  • Second, Treasury yields still serve as a floor for longer-term rates that affect businesses and consumers, and they would likely be lower if tariff-driven inflation pressures had not kept core inflation sticky and delayed Fed easing.
  • Third, housing affordability is constrained by elevated home prices, driven by supply and demand rather than just financing costs.

In our view, moderating inflation and a weakening labor market this year should lead to lower yields regardless of the government's mortgage purchase activities. To vastly improve home affordability, though, we need to see a lot more housing supply.

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