After months of delays tied to last fall’s government shutdown, several major economic reports were finally released, including updates on inflation, home construction, home sales, and GDP. For buyers and homeowners in Everett, Mill Creek, and Bothell, these updates offer important insight into where mortgage rates and housing activity may be headed next.
Here’s what you need to know.
The December Personal Consumption Expenditures (PCE) report — the Federal Reserve’s preferred inflation measure — showed prices rising a bit more than forecast.
Headline inflation: up 0.4% for the month, 2.9% year-over-year
Core inflation (excluding food and energy): up 0.4% monthly, 3% annually
One unusual contributor? A sharp increase in video streaming subscription costs, which rose nearly 20% in December.
What this means locally:
Inflation remains above the Fed’s 2% target, which supports a cautious approach to future rate cuts. At the same time, signs of a cooling labor market could create pressure for more flexibility later this year.
For homeowners in Everett, where many buyers are sensitive to payment changes, and in Mill Creek and Bothell, where loan sizes can be higher, inflation trends matter because they influence the direction of mortgage rates.
If inflation readings moderate in the coming months — especially as higher early-2025 numbers roll out of the annual calculation — we could see more encouraging progress toward rate stability.
Pending Home Sales, which track signed contracts on existing homes, slipped 0.8% from December to January and were down 0.4% from a year earlier.
Winter storms likely played a role in slowing activity across parts of the country. Meanwhile, signed contracts for new homes had reached their strongest levels in nearly four years late last fall.
Bottom line for Everett-area buyers:
Seasonal slowdowns are common this time of year. As we head toward spring, lower mortgage rates could bring more buyers back into the market. In fact, economists estimate that rate relief could add hundreds of thousands of buyers nationally.
For markets like Mill Creek and Bothell, where inventory is often tight, increased demand without a corresponding rise in listings could put upward pressure on prices.
There was some positive movement in home construction data:
Housing Starts: up 6.2% month-over-month to 1.404 million annual pace
Building Permits: up 4.3% month-over-month
However, both figures remain below year-ago levels.
Builder confidence also dipped slightly, with the Housing Market Index falling to 36. Any reading below 50 indicates more builders view conditions as poor than favorable.
Builders continue to cite affordability concerns and higher material costs as challenges, even though lower mortgage rates have helped buyer sentiment.
What this means for Everett, Mill Creek, and Bothell:
The region still faces a supply shortage. Even when construction picks up, it takes months for homes to move from permit approval to completion. That delay keeps available inventory limited — especially in desirable communities like Bothell and Mill Creek.
If buyer demand strengthens this spring, supply constraints could keep the market competitive.
The first estimate of Q4 2025 GDP showed economic growth at 1.4%, down sharply from 4.4% in Q3. Much of the slowdown was attributed to reduced government spending during the shutdown.
On the labor front:
Initial jobless claims: fell to 206,000
Continuing claims: rose to 1.869 million
While layoffs remain relatively low, continuing claims staying elevated suggests many unemployed workers are taking longer to secure new positions.
Bottom line:
The economy is cooling, but not collapsing. That balanced environment keeps the Federal Reserve in a careful position as it weighs inflation against employment trends.
Key reports ahead include:
Case-Shiller and FHFA Home Price Indexes (Tuesday)
Jobless Claims (Thursday)
Producer Price Index (PPI) (Friday)
These releases will provide further insight into inflation trends and housing conditions heading into spring.
Mortgage bonds ended last week near the upper end of their recent trading range. Support sits near the 25-day moving average, while resistance remains around the 100.38 level.
The 10-year Treasury yield remains range-bound between roughly 4.05% and 4.13%. If yields break out of that range, mortgage rates could shift accordingly.
Here’s the local takeaway:
Inflation is still above target but not accelerating dramatically
Housing demand may rebound as we move into spring
Construction has improved but inventory remains tight
Economic growth has slowed, which may influence rate policy
If you’re considering buying or refinancing in Everett, Mill Creek, or Bothell, preparation is key. When rates move — up or down — ready borrowers are in the strongest position to act quickly.
At Home Right Lending, we’re a mortgage brokerage — not a bank. That means we work with multiple lenders to help you find a loan solution that fits your goals, whether you’re buying, refinancing, or navigating complex income situations.
If you’re exploring options in Everett, Mill Creek, or Bothell, reach out today. We’ll walk you through your choices and help you build a plan that works in today’s shifting market.