U.S. Economy Defies Expectations — What a Stronger Economy Means for Mortgage Rates and Homebuyers

Despite months of forecasts that the pace would slacken, the U.S. economy is still running well above expectations. But, as recent revelations by Torsten Sløk, the Chief Economist for Apollo Global Management wrote, growth in America remains robust and resistant—perhaps that explains why Wall Street has been so wrong about a recession.

“The consensus has been wrong since January,” Sløk wrote, pointing to the fact that the U.S. economy hasn’t yet slowed down as much as economists thought it would have by now. “We as economists need to take a look in the mirror.”

A Strong Economy and Steady Consumer Spending

Recent data shows that U.S. GDP grew at a 3.8% annualized rate in the second quarter of 2025, with early forecasts suggesting even faster growth ahead. Consumer spending remains solid, and business investment continues to strengthen—especially in areas tied to artificial intelligence, energy infrastructure, and manufacturing.

While the housing sector is typically sensitive to higher interest rates, home sales and builder activity have remained surprisingly stable. Many analysts believe that lower mortgage rates in recent months have helped sustain demand even amid higher prices.

At MonaLending, we’ve seen this strength reflected in borrower activity. Buyers are reentering the market, and homeowners are once again exploring refinancing opportunities as rates have eased from their 2024 highs.

From ‘Rolling Recession’ to ‘Rolling Recovery’

Economists like Mike Wilson at Morgan Stanley call the current moment a “rolling recovery” — a shift from pockets of weakness earlier in the cycle to broad, crosscutting strength across industries.

Indeed, while some of the labor market data still look weak, taken together they indicate that the U.S. has averted an outright downturn and is in early-cycle recovery mode.

For a homebuyer, that shift might mean renewed confidence in the housing market — but it could also mean potential consequences for behind-the-curve mortgage rates.

How a Booming Economy Affects Rates

If you’d like to refinance or buy a home To borrow, learn more here.

As the economy starts to motor again, so inflation pressures can reappear and the Federal Reserve reconsider whether it has cut rates quickly enough. The Fed cut rates in September for the first time in a decade, but Sløk warns that continued strong growth could increase inflation risks if this trend persists.

“The risks on inflation are increasingly to the upside, especially if the Fed cuts rates further,” Sløk said.

Venture, ensuring borrowers’ and lenders’ timeliness in agreement obligations before the payment date. Should the economic surge forge ahead in 2026, rates may start heading higher again. That means now would appear to be a good time for both buyers and homeowners to secure a low rate, before market conditions change.

Opportunities for Homebuyers and Refinancers

In a strong economy, mortgage strategy still counts. At MonaLending, we’re dedicated to helping our clients find the loan programs that work best for them in shifting rates and navigate fluctuating rate environments as more homeowners do with ease! Some options include:

Fixed-rate mortgages for long-term stability

Lower initial payment options with adjustable-rate solutions (ARMs)

Refinancing programs to lower monthly costs or tap home equity

Our mortgage specialists make the process simple by understanding your financial needs and guiding you through the same-day loan approval at rates that should have never passed you by.

Whether you are buying your first home, looking to invest or refinancing an existing loan, MonaLending offers a wealth of experience and market knowledge to back a solution that is right for you!

✅ Fast pre-approvals

✅ Access to top lenders and rates.

✅ Expert advice from start to finish