This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Rates are provided by HousingWire in conjunction with Polly. Rates are updated in real-time. While other mortgage rates sites show rates being quoted to borrowers with top credit profiles, the HousingWire Mortgage Rates Center shows actual locked rates with borrowers of all credit profiles. Rates are inclusive of locks that occur below par, at par and therefore consider discounts, points, and rebates. Rates are based on a scenario with a 780 Credit Score, <60% LTV, Purchase transaction. As of 02/05/2026 – @12:00 PM EST.
Market Commentary:
Mortgage pricing should be flat again today. We got weaker jobs data, the softer ADP print but bond yields are roughly flat to slightly higher so no clear direction today.
The Federal Reserve held the federal funds rate steady at 3.50% - 3.75% at its January meeting, signaling a continued pause as inflation remains somewhat elevated and labor market conditions stabilize.
Mortgage rates remain sensitive to Fed commentary and inflation data rather than the policy rate itself. With the Fed signaling patience, mortgage rates may trade sideways in the near term unless new inflation data surprises. Stabilizing inflation and a steady policy stance create a more predictable rate environment, which can help hesitant buyers re-enter the market.
FedWatch: Target rate (in bps) possibilities, according to the CME Group (as of 02/05/2026 – 12:00 PM EST):
Home prices are poised to dip in 22 U.S. cities next year, a new analysis says. See where:
The supply of single-family homes has increased:
Austin, TX—Once Among the Nation’s Hottest Housing Markets—Is Now the Slowest
Migration magnets: These states are attracting the most new residents
Walmart Win:
Walmart has become the 10th US firm, and just the second non-tech firm after Berkshire Hathaway, to hit the $1 trillion mark. Founded by Sam Walton with one store in 1962, it now has almost 11,000 stores worldwide, revenue will top $700bn this year. Nvidia tops the list at $4.5tn, followed by Apple($4.1tn), Alphabet $4.0tn), Microsoft ($3.1tn), Amazon ($2.5tn), Meta ($1.7tn),Tesla ($1.53tn), Broadcom ($1.46tn), and Berkshire Hathaway ($1.1tn). -Elliot Eisenberg, Economist
News You Can Use:
· Trump says 'not much' doubt interest rates will be lowered, in NBC interview
· Home Buyers Finally Catch a Break
· NAR: Most Metros Still Posting Record-high Housing Wealth
· Mortgage Rates Stay Near 2025 Lows
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 02/05/2026, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. Actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 02/05/2026 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
