Mat Ishbia, president and CEO of United Wholesale Mortgage — and owner of the NBA’s Phoenix Suns — expects the housing market to rebound next year. - Getty Images
Home buyers in the U.S. have faced a tough year. Mortgage rates remained at 7% and home prices have reached new all-time highs, putting homeownership out of reach for many.
But that difficult situation could turn around in 2025, the chief executive of one of the country’s biggest mortgage providers says.
United Wholesale Mortgage UWMC President and CEO Mat Ishbia told MarketWatch that he’s preparing for a strong 2025 for his company, as he expects both home buying and mortgage refinances to pick up as interest rates are set to fall.
“It’s going to be an amazing purchase year in 2025,” Ishbia said in an exclusive interview with MarketWatch. UWM is one of the top two mortgage originators in terms of volume, according to federal government data.
Ishbia is not alone in predicting a strong recovery in the housing market next year. Other companies in the real-estate industry are equally optimistic; they expect more home buyers to enter the market, lured by an uptick in the number of homes for sale and dropping mortgage rates.
The buoyant sentiment comes on the heels of significant turbulence in housing over the last few years.
High mortgage rates and high home prices have stalled home sales, as buyers have held back. Prices have risen to new peaks, with the median price of an existing home sold in October hitting $407,200, according to the National Association of Realtors. The 30-year mortgage rate has also remained elevated, at 7% or above for most of the year.
Against this backdrop, people looking to buy a home have largely shied away. But there are signs of that hesitation fading.
Home-sales activity picked up in November, according to analysis of listings data by real-estate company Redfin RDFN. The company said that sales of previously owned homes rose to the highest pace since March 2023.
“House hunters realized that waiting probably isn’t going to get them a significantly lower mortgage rate anytime soon,” Elijah de la Campa, a senior economist at Redfin, said in a statement.
The gradual return of buyers is partly due to an increase in the number of for-sale listings, which gives buyers more options. In mid-December, new listings were up about 8% from a year ago, Redfin said. That was the biggest increase since June.
Home-buying demand is also showing signs of ticking up as falling mortgage rates make it relatively cheaper to buy homes.
After hovering around 7% for much of the year, the 30-year rate averaged 6.6% as of Dec. 12, according to Freddie Mac FMCC, which backs residential mortgages in the U.S. Rates were down for the third week in a row.
And consumers expect mortgage rates to keep falling in the coming months. A recent survey by Fannie Mae FNMA, which also backs residential mortgages in the U.S., found that a record-high share of consumers expect rates to drop over the next 12 months.
Fannie Mae expects the 30-year rate to fall to 6.4% in 2025, and 6.1% in 2026, according to its December forecast.
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Given the changing home-buying environment, “home buyers will have more success next year,” Lawrence Yun, chief economist at the National Association of Realtors, an industry group, said in a statement.
“The worst of the affordability challenges are over,” Yun added, “as more inventory, stable mortgage rates and continued job and income growth pave the way for more Americans to achieve homeownership.”
UWM making moves to prepare for a resurgence in demand, CEO says
UWM is also in that camp. Ishbia believes that the housing market is on the cusp of a strong year.
The company has made significant investments into new hires and technology, he said. “We’re prepared to grow significantly in 2025, and that’s just on the purchase side.”
Refinances will also pick up, he added, if rates fall as he expects. He anticipates that much of refinancing demand will come from buyers who bought at 7% rates, who would be motivated to refinance to lower their monthly payment.
“So you could have a double-dip year,” he continued, “where you have a big purchase year and a big refi year — and we’re prepared at UWM for that opportunity.”
Housing-market demand could be derailed by 3 factors
To be sure, Ishbia’s excitement isn’t unanimous.
The lock-in effect is still persistent, some economists argue. Homeowners with low rates still see little reason to sell and take on a 7% mortgage in place of one that’s in the 3% or 4% range.
“If lower mortgage rates materialize, they could help thaw the housing market, but the deep freeze for many rate-locked homeowners is likely to linger,” Odeta Kushi, deputy chief economist for First American Financial, wrote in a recent blog post.
The coming year will also be laden with uncertainty over government policy, such as fiscal and tax policy, Mark Palim, chief economist at Fannie Mae, told MarketWatch in an interview on Tuesday.
Though most economists predict a drop in mortgage rates over the course of 2025, rates could still increase as the financial markets assess the direction of the economy, as well as fiscal and monetary policy.
Online real-estate platform Zillow Z ZG is also cautious about prospects for home buyers next year.
“There’s a strong sense of déjà vu on tap for 2025. We are once again expecting mortgage rates to get better gradually, and opportunities for buyers should follow, but be prepared for plenty of bumps on that path,” Skylar Olsen, chief economist at Zillow, said in a statement.
Trump presidency a boon to housing, UWM chief says
The new year will also usher real-estate tycoon Donald Trump into the White House for the second time.
The real-estate industry is broadly optimistic about what Trump 2.0 could mean for the sector.
Trump campaigned on promises to trim regulations in an effort to help boost home building, and said he would lower mortgage rates to 3% or even 2% — despite the fact that the president does not control or set interest rates.
At the same time, concerns over how Trump’s policies will impact the U.S. economy could also affect the direction of mortgage rates.
If the administration’s policies push up inflation, that could prompt the Federal Reserve to hold interest rates higher to address consumer prices, which in turn affects the 10-year Treasury note BX:TMUBMUSD10Y. And the 10-year moves in tandem with mortgage rates, so an increase could push up rates on 30-year fixed mortgages.
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Nevertheless, Ishbia said that he believes the second Trump presidency could help the mortgage-lending sector. “Trump’s really good for the economy, good for business,” the UWM chief said.
Overall, “I believe rates are to come down a little bit, the economy is stronger [and] consumer sentiment is better with the [incoming] Trump administration,” Ishbia added — which adds up to “a lot of really positive tailwind momentum” in 2025.
