Better Mortgage Spreads Boost Housing Demand in 2025

Since its relaunch, more than a year ago, banks have been increasing the cost of inflation-adjusted loans.

This week, the interest rates on UVA mortgage loans, which are updated above inflation, increased again this week. Some banks have already been up five times in a year. Rates that were not up to 5% 12 months ago, are now in almost two digits. The real estate sector came on the alert to the fear that the demand for credit will slow down, which for many families is the only alternative to having access to a home. “This week they increased several …

Better mortgage spreads boost housing demand in 2025

One of the lesser known storylines in housing economics is that the improvement in mortgage spreads since 2023 has contributed to a noticeable trend in purchase application data for 2025, which is now showing 15 consecutive weeks of positive year-over-year growth.  Mortgage spreads recently turned negative due to market volatility, which resulted in an increase of 20 to 25 basis points in mortgage rates. However, as the stock and bond markets ha…