Mortgage rates have risen again last week, leaving them close to 7% to start the year.
The average 30-year fixed-rate mortgage rose to 6.91% in the week to Wednesday, from 6.85% on December 26, according to Freddie Mac data. 15-year mortgage rates jumped to 6.13% from 6% a week earlier.
“By more than just shy of 7%, mortgage rates hit their highest point in nearly six months,” Sam Khater, Freddie Mac's chief economist, said in a statement. “Compared to this time last year, rates are high and the affordability headwinds of the market continue.”
This is the third consecutive week of rate gains and the highest level since July.
Read more: What determines mortgage rates? It's complicated.
Factors such as high rates and high house prices that have shut many potential buyers out of the market show no sign of easing for now. But there are signs that some buyers are pushing ahead with home purchases despite affordability challenges: Housing sign a contract rose in November to reach the highest level since early 2023, according to the National Association of Realtors.
Demand for mortgages fell sharply in the last week of 2024, a combination of a sluggish holiday market and rates nearing 7%, according to the Mortgage Bankers Association.
Applications to buy a new home fell 13% through Friday compared to two weeks earlier, while refinancing applications were down 36%. The results include an adjustment for the Christmas holidays.
The end of December is usually one of the slowest periods seasonally for the housing market as buyers and sellers pause during the holidays and cooler weather.
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages and home insurance.
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