If the mortgage market felt unusually quiet over the holiday stretch, that’s because it was. The final weeks of December are known for “holiday trading,” which is when fewer people are actively buying and selling in the bond market. Since mortgage rates are driven by bonds, this low-volume environment often leads to slow, sideways movement—and sometimes random mini-swings that don’t last.

Why holiday trading matters for mortgage rates

Mortgage rates don’t move on vibes—they move based on the bond market (especially mortgage-backed securities and U.S. Treasury yields). But during holiday weeks, trading activity drops sharply. When fewer traders are involved, the market can react more than usual to small events… or barely react to big ones. Either way, it’s harder to trust short-term movement as a true “new trend.”

This is why you’ll often see rates feel “stuck” in late December, even when headlines hit.

What we saw going into the end of last week

The bond market has been in a tight “range” for months, and late December narrowed that range even more. In plain English: rates have been on cruise control. Even when economic updates show up, they tend to cause brief movement that fades quickly because there just isn’t enough trading volume to create lasting momentum.

That’s exactly what happened during the holiday stretch—mostly sideways conditions, with rates staying in the lower portion of the recent range.

What changed on 12/29/2025

Today brought a few small inputs, but the overall theme stayed the same: quiet market, small moves.

1) A small lift from Europe
Overnight, European bond markets improved after returning from the holiday break. U.S. bonds followed that move during the quieter overnight hours, but once the U.S. trading day got underway, the market was less eager to keep pushing stronger. That’s common during low-liquidity weeks—momentum is harder to sustain.

2) Pending home sales improved
Pending home sales data came in higher than the prior reading. That’s generally a positive sign for housing activity. But in this kind of market environment, even decent data doesn’t always move rates in a meaningful way.

3) Mortgage rates barely edged lower
The average 30-year fixed only improved by a tiny amount—so small it was measured in hundredths of a percent. But that tiny move was still enough to mark a “barely new” two-month low, meaning the average is now sitting around the lowest levels seen since late October.

That doesn’t mean rates are about to fall fast. It just confirms the bigger story: rates have drifted into the lower end of the range again, helped by calm conditions and small bond-market improvements.

What you should expect until 2025 is fully over

Until the holiday period is completely behind us, here’s the most realistic expectation:

• More sideways movement

• Small, sometimes random shifts

• Headlines that don’t stick

• Limited follow-through until January

Even when the bond market is technically open, trading can still be dominated by automated activity and light participation. That’s why late December movement can look dramatic for a moment—and then disappear by the end of the day.

Takeaway for homebuyers

This quiet holiday window can actually be useful. When markets are calmer and rates are hovering near recent lows, you can:

• Run the numbers and see what payment ranges look like

• Get pre-approved or refresh your approval so you’re ready

• Set a strategy for locking if a better window opens in early January

The goal isn’t to “guess the bottom.” It’s to be prepared so you can act quickly when the market becomes more active again.

Have Questions or Want to Talk Through Your Options?
Whether you're planning to buy, refinance, or just want clarity on what today’s rates mean for you, I’m here to help.
Simply fill out the contact form on this page or give me a call—I’d be happy to walk you through your next steps.

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Source: Mortgage News Daily