The new year has started with rising mortgage rates. Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate (FRM) averaged 6.91% this week, adding to affordability challenges for homebuyers.
Rates have been steadily rising since October, mirroring increases in the yield on the 10-year Treasury bond.
“Inching up to just shy of 7%, mortgage rates reached their highest point in nearly six months,” said Sam Khater, Freddie Mac’s chief economist. “Compared to this time last year, rates are elevated and the market’s affordability headwinds persist. However, buyers appear to be more inclined to get off the sidelines as pending home sales rise.”
The rates
The 30-year FRM averaged 6.91% as of January 2, 2025, up from last week when it averaged 6.85 percent. A year ago at this time, the 30-year FRM averaged 6.62%.
The 15-year FRM averaged 6.13%, up from last week when it averaged 6%. A year ago at this time, the 15-year FRM averaged 5.89%.
With steadily rising interest rates, mortgage applications decreased by 21.9% percent from two weeks earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending December 27, 2024. The results include an adjustment to account for the Christmas holiday.
“Mortgage rates moved higher through the last full week of 2024, reaching almost 7% for 30-year fixed-rate loans,” said Mike Fratantoni, MBA’s chief economist “Not surprisingly, this increase in rates – at a time when housing activity typically grinds to a halt – resulted in declines in both refinance and purchase applications.”