The report seeks to highlight the major economic mortgage drivers along with CRT Performance and an origination quality index both derived from Freddie Mac’s ACIS® & STACR® Programs.
The latest quarterly economic indicators reflect accelerating growth in key areas. Gross Domestic Product (“GDP”) continued to demonstrate strength, expanding by 0.7% during the quarter and 2.7% on an annual basis (see: Gross Domestic Product). The unemployment rate remained steady at 4.1% (see: Unemployment Rate). Personal income per capita increased further, reaching an all-time high of $73.4K per household (see: Personal Income per Capita). Meanwhile, the labor force participation rate remained unchanged, consistent with levels observed from 2015 to 2018 (see: Labor Force Participation Rate). Sustained economic growth has tempered expectations for the Federal Reserve to lower interest rates in 2025. Current bond market projections suggest one to two 25-basis-point rate cuts. This shift in rate expectations has pushed mortgage rates back toward 7% (see: Mortgage Rate Developments).
Quarterly GSE securitization volumes are near a 10-year low. Freddie Mac’s market share has steadily increased, rising from approximately 35% to 56% in the most recent quarter. Meanwhile, the estimated CRT-eligible share of new securitizations remains stable near the all-time high of 84% (see: Origination Volume).
Despite low levels of originations and elevated mortgage rates, home prices continued to increase throughout 2024. The index rose by 4.0% year-over-year and 1.7% quarter-over-quarter, reaching an all-time high (see: National House Price Change). On a year-over-year basis, all states reported rising home prices, with growth ranging from 0.7% in Florida to 9.1% in Connecticut. The East Coast, particularly the Northeast, has experienced the strongest growth (see: Annual State Level House Price Change).
This quarter we have also published a special segment on the increase in early delinquencies.
