🍵 Market Update 01/12 │ Rates hit lowest level in 3yrs; Trump Tweet Recap

Macro
• Mortgage rates briefly hit 5.99%, lowest in ~3 years
• Jobs growth slowed without signaling a recession
• Policy expectations drove markets more than data

Central Ohio
• Inventory up 40.3% YoY, shifting leverage to buyers
• Showings jumped ⬆️ 37.8% WoW
• Prices still up YoY, but momentum cooled short term

Mortgage rates moved meaningfully lower last week, briefly touching 5.99%, and buyer behavior responded quickly. Nationally, housing remains constrained by supply, but rate sensitivity is clearly back. In Central Ohio, inventory is higher, price reductions are widespread, and days on market have extended. Demand has not disappeared, but it is selective. Homes that are priced correctly still move. The market has shifted from urgency to evaluation.

Tailwinds
• Mortgage rates near three-year lows
• Rising inventory gives buyers more choice
• Showings rebounded sharply WoW in Central Ohio

Headwinds
• Affordability remains stretched for many buyers
• Execution risk around policy-driven rate relief
• Demand remains rate-sensitive

Last week, Trump’s affordability tweets focused on three pressure points: housing competition, mortgage rates, and consumer credit. Markets reacted unevenly because each proposal carries different execution risk. The clearest market response showed up in mortgage rates. Rates briefly touched 5.99%, the lowest level in roughly three years, driven by expectations alone. No policy action has occurred yet. That reaction highlights how sensitive housing is to rate narratives.

Tweet 1: Banning Institutional Investors from Buying Single-Family Homes
This proposal aims to reduce competition for first-time buyers by limiting large funds. Institutional ownership is concentrated in specific Sun Belt markets, not evenly nationwide. Any benefit would likely be localized and short term. Enforcement would be complex and face legal challenges tied to seller choice.
• Likelihood of implementation: 4 out of 10
• Affordability impact: 6 out of 10, mostly localized
• Primary effect: Reduced cash competition in select markets

Tweet 2: Directing Fannie Mae and Freddie Mac to Buy $200B in MBS
This targets mortgage rates directly by increasing demand for mortgage bonds. Higher MBS prices push yields lower, which pulls rates down. Markets reacted immediately to the expectation alone, even though no purchases occurred. Coordination across agencies would be required, but this is a proven lever.
• Likelihood of implementation: 7 out of 10
• Affordability impact: 8 out of 10
• Primary effect: Broad rate relief if executed

Tweet 3: Capping Credit Card Interest Rates at 10% for One Year
This proposal sounds consumer-friendly but creates second-order risks. Credit card rewards and approvals rely on higher margins. A hard cap could reduce access, eliminate rewards, and push higher-risk borrowers to worse alternatives.
• Likelihood of implementation: 5 out of 10
• Affordability impact: 3 out of 10
• Primary effect: Tighter credit availability

Takeaway: Lower mortgage rates offer the fastest housing relief, but without new supply, affordability gains remain limited.

The December jobs report showed slower hiring but a still-tight labor market. Nonfarm payrolls rose by 50,000, well below expectations, while the unemployment rate fell to 4.4%. Wage growth held at 3.8% YoY, helping incomes keep pace with inflation. The data reduced pressure for immediate Fed action but did not signal a sharp slowdown. Markets interpreted the report as supportive for rates without threatening growth. Housing reacted positively as mortgage rates eased.

Highlights
• Job growth: +50,000, weakest monthly gain of 2025
• Unemployment rate: 4.4% ⬇️ from 4.5%
• Wage growth: 3.8% YoY
• 2025 total job gains: 584,000, weakest since 2003
• Construction, retail, and manufacturing lost jobs

Takeaway: Slower hiring helps rates, but stable wages support buyers who can qualify.

Housing is getting short-term relief from rates, not fundamentals. Mortgage rates briefly fell to 5.99%, based on expectations alone. Labor remains tight enough to support incomes, while slower hiring gives rates room to fall. Policy headlines are acting as tailwinds, but execution risk remains high.

Stocks finished higher as investors reacted to softer labor data and affordability policy headlines.
• Dow Jones: ⬆️ 2.3% WoW
• S&P 500: ⬆️ 1.6% WoW
• Nasdaq: ⬆️ 1.9% WoW

Rates moved lower on expectations of policy support, not confirmed bond buying.

Mortgage Purchase Applications (Last 4 Weeks):
• 176.5 → 169.9 → 169.9 → 159.3
Same Period Last Year:
• 157.1 → 157.1 → 136.7 → 127.7

Purchase demand remains above last year, but week-to-week momentum cooled as buyers wait for clearer rate direction. We’ll see what activity last week’s drop drives this week.

Market Dynamics: A Seller’s Market shifting toward Buyer-friendly conditions.

Central Ohio continues to shift toward balance. Inventory is higher, price reductions are common, and buyers have more leverage than a year ago. Prices remain up YoY, but momentum has cooled short term. Showings rebounded sharply WoW, signaling strength in the new year.

Stats from the Last 4 Weeks
Dec wk 2 ’25 – Jan wk 2 ’26 (12/08 – 01/11)
• Closings: 721, ⬆️ 8.7% YoY
• New Listings: 803, ⬆️ 13.3% YoY
• Active Inventory: 3,897, ⬆️ 40.3% YoY, ⬆️ 1.3% WoW
• Median Sales Price: $340,000, ⬆️ 5.3% YoY
• Avg Days on Market: 45, ⬆️ 25.0% YoY
• Months of Supply: 5.4
• Active Listings w Price Reductions: 58.1%

Year-to-Date (YTD) Snapshot
• YTD Closings: 381, ⬇️ 13.0% YoY
• YTD Median Price: $335,000, ⬆️ 11.1% YoY
• YTD Avg $/SF: $207.53, ⬆️ 5.5% YoY
• YTD New Listings: 767, ⬆️ 20.8% YoY
• YTD LP/SP: 97.8%, ⬆️ 0.9% YoY
• YTD Avg DOM: 43, ⬆️ 20.8% YoY

Showings & Affordability

Note: An affordability index of 100 means a household earning the median income can afford the mortgage payment on a median-priced home.

The next Columbus Investors Club Meetup is January 29th, 6–8 PM at Ohio Brewing Co.

Here’s the data:

Side-By-Side Data, Jan Week 2, 2025 - Central Ohio (2023-2025)

Central Ohio Market Update, Jan Week 2, 2025