🍵 Market Update 12/15 │ The Fed Cut, but Mortgage Rates Held

• The Fed cut 25 bps, moving to 3.50–3.75%
• Mortgage rates held near 6.29%
• 10-year yields rose slightly late week
• Purchase apps down WoW but up strongly YoY

• Affordability improved again
• Inventory up 56% YoY but down WoW
• Closings up YoY, new listings up double digits
• Showings remain below last year
• Median sales price up 3.1% YoY

The rate cut from the Federal Reserve set the tone last week. Markets reacted with cautious optimism, but rising Treasury yields late in the week kept mortgage rates from dropping meaningfully. Buyer sentiment nationwide remains soft, shaped by affordability pressure and elevated required incomes. Central Ohio continues to show relative stability, with higher year over year inventory giving buyers more options but also extending days on market.

Tailwinds
• Fed cut 25 bps, easing policy stance
• Mortgage rates stable near 6.29%
• Applications still up 17.2% YoY
• Central Ohio affordability improving
• New listings remain strong in Columbus

Headwinds
• Buyer sentiment nationwide is cautious
• 10-year Treasury rose during the week
• Elevated home prices relative to income

Last week, the Federal Reserve cut the federal funds rate by 25 bps to 3.50–3.75% at its December meeting. This marks the third consecutive cut, but policymakers signaled a more cautious approach ahead. Chair Powell emphasized uncertainty around the path of future cuts and indicated that the current rate may sit near neutral (doesn’t hurt or help the economy). The Fed will also resume short-term Treasury purchases to support reserves (short-term, so not official QE). Markets initially reacted positively, though rising bond yields tempered some enthusiasm. For real estate, the message is clear: policy is easing, but mortgage rates will likely hold steady for now.

• Rate cut: 25 bps to 3.50–3.75%
• Vote split: 9-3 among FOMC members
• Balance sheet: short-term Treasury purchases restarting
• Only one projected cut in 2026
• Powell: “Wait and see” stance, uncertainty about pace
• No Fed officials currently expect a rate hike as a base case

Takeaway: Expect mortgage rates to drift rather than drop sharply.

Markets reacted to the Fed’s 25 bp cut with cautious optimism, but rising Treasury yields late in the week kept mortgage rates from moving lower. Purchase apps held near 2025 highs, showing that demand remains present when rates stabilize.

The major indices posted mixed results as markets digested the Fed cut and a late-week tech decline.

• Dow Jones: ⬆️ 1.0% WoW
• S&P 500: ⬇️ 0.6% WoW
• Nasdaq: ⬇️ 1.6% WoW

Weekly Range: 4.13% to 4.19%
Net Change: ⬆️ 0.48% WoW

• Dec 08 → Dec 09 → Dec 10 → Dec 11 → Dec 12
• 6.36% → 6.35% → 6.30% → 6.26% → 6.32%
• Weekly Avg: 6.32%
• Today’s rates hover around 6.29%.

Mortgage Purchase Applications (Last 4 Weeks):
168.7 → 181.6 → 186.1 → 181.6

Same Period Last Year:
136.0 → 152.9 → 161.5 → 154.9

WoW: ⬇️ 2.4%
YoY: ⬆️ 17.2%

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

The Central Ohio market shows stable activity with improving affordability and stronger listing volume. Inventory is up sharply year over year, giving buyers more choices, while prices remain firm. Showings are lower, reflecting seasonal slowdown and higher supply. Sales remain steady, and price reductions continue to normalize the market. New listings outperform last year, indicating sellers remain active into December.

Last 4 Weeks
🏠 CLOSINGS: 2,042, ⬆️ 0.5% over LY
🏠 NEW LISTINGS: 1,659, ⬆️ 15.3% over LY
📈 ACTIVE INVENTORY: 4,504 homes, ⬆️ 56.0% over LY & ⬇️ 3.8% WoW
💲 MEDIAN sales price: $329,900, ⬆️ 3.1% over LY
⬇️ 59.5% of active listings have reduced price
📅 AVG DOM: 39, ⬆️ 25.8% over LY
📅 MONTHS of SUPPLY: 2.3

YTD Performance
🏘️ YTD Closings: 27,403, ⬆️ 0.9%
💲 YTD Median Price: $337,500, ⬆️ 3.4%
📏 YTD Avg $/SF: $212.56, ⬆️ 2.7%
% LP/SP: 97.8%, ⬇️ 0.5%
🏘️ YTD New Listings: 30,433, ⬆️ 8.1%
📏 Avg $/SF: $208.37, ⬆️ 2.9%
% LP/SP: 97.7%, ⬆️ 0.7%

Showings & Affordability

Question: Where would rates need to be for Franklin County to have an Affordability Index of 100? 🤔

Answer: Assuming a median home price of $340,000 & a median income of $76,536, mortgage rates would need to be at 5.80% to achieve an Affordability Index of 100 - ie, a family with the median income can afford the mortgage payment on a median-priced home. The average weekly Affordability Index for 2025 in Franklin Co. is 98.4. As of July 2025, the National Affordability Index is 98.8 (Source: National Association of Realtors via FRED®).

Here’s the data:

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

Central Ohio Market Update, Dec Week 2, 2025

Thanks!
Jim