Rocket Fuel Newsletter – Remodeling, sales and mortgage rates: What to expect in 2025

Philadelphia Eagles receiver A.J. Brown was filmed reading a book on the sidelines during a playoff game versus the Green Bay Packers on January 12. Now, the Eagles are headed to the Big Game and the book by Jim Murphy is a number one seller.

For more information on “Inner Excellence: Train Your Mind for Extraordinary Performance and the Best Possible Life,” click here.

Also this week: Read about forecasts in home remodeling, home sale trends over the past year and what might happen with mortgage rates in 2025.

Fuel up! 🚀  

Modest gains predicted in 2025 for home remodeling

The Leading Indicator of Remodeling Activity (LIRA), issued by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, forecasts a mild growth in spending for home renovations and repairs by owner-occupied homes in 2025. A 1.2% growth is expected. Read the full report here.

The U.S. just experienced its slowest housing market since 1995

Total home sales for last year have been reported, and they are notably low. 2024 marked the slowest year in nearly three decades in the U.S., a downturn attributed to high interest rates (hovering around 6.5%) and elevated median home prices ($407,500). Read the full article here.

December 2024 new residential home sales

Last year, new residential home sales saw a 2.5% increase, providing optimism for 2025. The median home price was $427,000, while the average home price was over $500,000.

What might happen to mortgage rates in 2025?


As we settle into 2025, interest rates and their future trajectory are among the most discussed topics. This is coming off a year where the federal funds rate remained at a range of 5.25% – 5.50% (with an effective rate of 5.33%) for more than half the year, a 2-decade high.

Last week, we discussed high interest rates and how they’ve negatively impacted housing affordability. The “perfect storm” of elevated mortgage rates and an unwillingness to sell by homeowners has led to the lowest level of existing home sales in a year since 1995. Many have wondered when relief will arrive.

While the Fed began cutting rates in September, mortgage rates haven’t followed suit. In fact, they’ve moved in the opposite direction.

Why haven’t mortgage rates fallen?

Many believe that persistent inflation will continue to linger. As a result, mortgage rates – which are more closely tied to the bond markets – have remained elevated as investors price in their concerns.

During a recent meeting, the Federal Reserve decided to pause on further rate cuts, stating that they want to see more progress in reducing inflation. The federal funds rate was kept at 4.25% – 4.5%, and it may remain at this level for some time. Federal Reserve Chair Jerome Powell stated the Fed is in “no hurry” to adjust rates.

Markets do not expect the Fed to make any changes at its next meeting in March. However, investors still anticipate rate cuts throughout the year. The expectation is that the federal funds rate will be around 3.75% – 4% by the December meeting, implying two rate cuts between now and then.

What could change?

There’s a lot of time before the next meeting in March. The Fed is data-dependent, and there will be several key reports on the labor market and inflation that could shift its stance.

Additionally, there’s a new administration, with a president who has been vocal about the need to lower rates. New economic policies like tariffs could also influence inflation and, consequently, the Fed’s decisions.


The bottom line

While no one can predict the future with certainty, the consensus is that interest rates will trend downward over the course of 2025, just not as quickly as everyone might like.

Start 2025 strong by joining us at these upcoming events.

Let’s connect, learn and grow together at these trade shows:

Secure your spot today and set the tone for a successful year.

Two solvers finished last week’s puzzle in less than a minute, with the leader coming in at 32 seconds.

This week’s puzzle gets 4 Rockets out of 5.

Click here to solve!

Good luck!