- Mortgage rates decreased from 7.26% to about 6.64%, causing a slight rise in demand.
- Data on mortgage applications has indicated upward movement in 4 of the past 9 weeks.
- Home sales that are pending have not completely reacted to the rate decreases but are showing better numbers than in 2023.
- Mortgage spreads are still high, making rates more expensive than they would typically be.
- The quantity of homes for sale is still less than what is normally seen, leading to competition even with buyer caution.
Why Mortgage Rates Are More Important Than Ever
In today’s unsure economic setting, changes in mortgage rates have turned into a very important factor in housing market activity. As worries about inflation, changes in jobs, and questions regarding global trade continue to impact financial predictions in 2025, homeowners and homebuyers are paying close attention to mortgage rates. A small change in percentage can add up to a large amount of money over the course of a loan, greatly affecting how confident consumers feel and their choices about buying.
Real estate experts throughout the nation, including Steve Hawks, a highly successful agent in Las Vegas, point out the emotional effect of interest rates. “In real estate, emotions cause actions—and mortgage rates are the most powerful emotional trigger for buyers,” Hawks states. Buyers see a decrease in rates as a chance to take action, especially when rates get near or go under the important 6% mark. However, if rates were to go back up toward 7%, much of that excitement would disappear.
As we get further into the spring home-buying period, feelings connected to mortgage rates are still a main sign of buying activity, particularly in active city areas like Las Vegas.
Purchase Application Data: Some Good News, Increasing Optimism
Mortgage applications offer some of the earliest and most informative signs of how interested buyers are. At the start of 2025, the numbers have shown careful progress, stopping a long period of negative comparisons to the previous year.
The Current Numbers:
- 4 weeks of growth in application numbers
- 3 weeks of decline where applications went down
- 2 weeks of no change without any big difference
While this combination might not look very positive, the real improvement is the return of growth compared to the year before, which is especially important considering the big drops seen in 2023 and 2024. This suggests that at least some possible buyers are coming back into the market as rates become more steady.
Housing analyst Logan Mohtashami suggests caution against being too optimistic in how these numbers are understood. He makes clear that even though some progress is visible, the market has not yet reached “rate stability at levels that regularly encourage major activity.” His point where things balance out seems to be a mortgage rate near 6.64% or lower. Above that, the total cost of financing still creates obstacles for people buying their first home and investors who are sensitive to price.
In general, while rising application numbers are a move in the right direction, they are not yet strong or consistent enough to mean that housing demand is fully coming back.
Pending Sales: A Slower Reaction Worth Paying Attention To
Pending home sales—deals agreed upon but not yet finalized—act as a delayed sign of buyer demand. These figures usually come after mortgage application numbers by one to three months, providing a somewhat later confirmation of market interest or doubt.
Weekly Pending Sales Data:
- 2025: 333,385
- 2024: 345,502
- 2023: 320,804
While 2025 has not yet reached the levels of 2024, it is clearly higher than 2023, showing some upward trend. Experts think that if the current growth in applications continues for another 12 to 14 weeks, pending sales should also increase with more noticeable gains. Considering how closely buyer actions are connected to mortgage rate trends, keeping a close watch on weekly rate changes is still very important.
Steve Hawks advises buyers in Las Vegas to consider pending sales as a dependable signal. “It’s a later sign for sure, but once pending contracts increase over several weeks, you are seeing a fundamentally stronger market underneath,” he says.
The Function of the 10-Year Yield in Predicting Mortgage Rates
The 10-Year Treasury Note yield is a strong predictor of mortgage rate changes, even more so during times of economic uncertainty. Mortgage lenders use this yield as a standard to decide their own risks and expected profits.
Predicted Ranges for 2025:
- 10-year yield: Between 3.80% and 4.70%
- Mortgage rates: Between 5.75% and 7.25%
At the start of 2025, we have seen yields stay near the middle of these predictions. However, sudden changes coming from Federal Reserve policy announcements, global trade disagreements, and general economic numbers can change yields rapidly.
When bond yields go down, it usually lowers the cost to borrow money, making homes more affordable. Lower yields often point to investors expecting slower economic growth or less inflation—two things that encourage the Fed to keep interest rates steady or reduce them.
For homebuyers and investors, especially those active in Las Vegas, keeping track of the 10-year yield along with comments from the Federal Reserve can give early clues about where rates (and therefore home affordability) are going next.
Mortgage Spreads: Why Rates Seem More Expensive Than They Should
Mortgage spreads—the variation between mortgage rates and the 10-year Treasury yield—are another often missed factor that affects mortgage costs. In typical market situations, this spread is usually between 1.60% and 1.80%. However, in recent times, we have seen this increase to about 2.54%.
Why Are Spreads High?
Several things cause this situation:
- Investor worry because of economic unpredictability
- Strict lending rules from banks and lenders
- Higher costs for managing loans and risks related to early repayment
This high spread means that even when the 10-year yield comes down, mortgage rates do not decrease as much as they might otherwise. Mohtashami thinks spreads could reduce back down by 0.27% to 0.41% during 2025, which would help mortgage rates get closer to 6%—a very important point for people’s feelings and what they can afford.
Such a change, even if it seems small, could greatly affect how the housing market reacts over the coming months.
Inventory Levels: Recovering but Still Lower Than Normal
The number of homes actively for sale has started to go up, showing signs of getting better after the very low levels seen during the pandemic. However, the total number of listings is still much lower than what is considered normal for a healthy market.
Comparison of Active Listings:
- March 2025: 655,626 homes
- March 2024: 500,000 homes
- March 2022 (lowest point): 240,497 homes
- 2015 (normal level): 982,369 homes
In Las Vegas, inventory trends are similar to the national situation. Steve Hawks mentions, “Inventory is being rebuilt, but we are not close to normal. Buyers still compete when homes priced well are listed—even with today’s rates.”
Low supply continues to support home prices and makes the market competitive in many important zip codes. Until there is a big increase in new home construction or more current homeowners decide to list their properties, these conditions will probably continue.
New Listings: Seasonal Increase Returns
After several years of slow listing activity, the spring market of 2025 seems to be picking up speed, giving hope that inventory levels might become normal again—though slowly.
Weekly New Listings:
- 2025: 68,191
- 2024: 59,542
- 2023: 41,415
- Levels before 2020: 80,000–110,000
While these numbers suggest positive movement, we are still far below typical seasonal highs. Some possible sellers are still hesitant, because they have very low mortgage rates from the time of the pandemic. Others are waiting for stronger price signs before putting their homes on the market.
Still, cities like Las Vegas are starting to see activity. “We are finally seeing sellers who waited on the sidelines coming back—and that is very important for market clarity and balanced pricing,” says Hawks.
Price Reductions Suggest a Market Cooling Down—Not Crashing
The percentage of active listings that have had price reductions often shows changes in demand and what sellers expect. As of early 2025, price cuts are becoming more common:
Percentage of Price Reductions:
- 2025: 34%
- 2024: 31%
- 2023: 31%
This upward trend in price reductions indicates that sellers are becoming more realistic, especially with higher borrowing costs. It also points to a more balanced market—not a crash, but a decrease in the very high demand seen after 2020.
Logan Mohtashami predicts a national price increase of about 1.77% in 2025. When considering inflation, real price growth could be flat or even go down. However, certain local markets—like parts of Las Vegas—may do better because of local demand factors such as schools, job centers, and nearness to entertainment areas.
Upcoming Economic Indicators Point Toward Uncertainty
Several reports coming soon have the ability to affect both bond yields and mortgage markets quickly and significantly. These include:
- Meetings of the Federal Reserve about policy
- Numbers for retail sales
- Information on jobless claims
- Surveys on builder confidence
- Reports on housing starts and sales of existing homes
Any weakening in job market strength or easing of basic inflation could improve investor feelings and cause bond yields—and mortgage rates—to decrease. On the other hand, signs of the economy getting too hot could delay expectations of rate cuts and extend high borrowing costs.
The Federal Reserve’s way of speaking and its choices especially have large effects on how borrowers see things and what they do. Keep informed—not just to watch trends, but to time your decisions to buy and sell in a smart way.
Implications for Las Vegas Homebuyers and Sellers
In a fast-moving market that is sensitive to rates like Las Vegas, small changes in mortgage rates can have big effects.
Buyer Advice:
- Get pre-approved now to secure current rates
- Be prepared to act fast on listings you like
- Concentrate on neighborhoods that will hold value long-term, like those close to schools or business areas
Seller Strategies:
- Spring or early summer is your best time to sell
- Price your home competitively so it does not stay on the market
- Check local listings each week to change your plan if needed
Buyers and sellers who are adaptable, knowledgeable, and ready will have an advantage in 2025—especially in a city that changes quickly like Las Vegas.
Real Estate Investment Outlook: Increasing Opportunity
Lower interest rates make predictions for cash flow better and speed up the possibility of returns for different kinds of properties:
- Apartment buildings are still very wanted in city areas
- Single-family homes still get good rental income and demand when resold
- Short-term rentals close to the Strip or local attractions gain from strong tourism recovery
As rates decrease closer to 6%, or even go below that point, investor interest will probably increase greatly—causing more competition and pushing prices higher. The second half of 2025 could be very active if financing becomes much less expensive.
Final Thoughts: A Spring Recovery or Just a Short Improvement?
Lower mortgage rates have brought some relief to a tight and uncertain housing market in the U.S. However, this recovery is still not certain. Continuing positive progress depends on whether rates keep moving downward and whether spreads finally return to normal.
Buyers, sellers, and investors—all should watch mortgage rates, inflation, inventory, and economic numbers closely. More chance for success is coming, but being ready and timing things right will be important for success and avoiding problems in the months ahead.
References
- Mohtashami, L. (2025, March). Lower mortgage rates spark housing demand heading into spring. Retrieved from Altos Research data cited in article.
- Altos Research. (2025). Weekly pending contract and listing data. Retrieved from insights cited in article.
- Federal Reserve Board. (2025). Meeting preview and rate policy commentary. Data referenced in public-facing economic calendar information.