In the first week of the new year, mortgage rates rose to their highest level since July 2024. According to the Primary Mortgage Market Survey from Freddie Mac, the 30-year fixed-rate mortgage averaged 6.91% as of Jan. 2, 2025, up from 6.85% a week ago.
Mortgage rates dipped to an average of 6.60% in the second week of December before slowly climbing through the end of 2024.
According to Freddie Mac, the 15-year fixed-rate mortgage averaged 6.13% as of Jan. 2, up from 6.0% a week ago. A year ago, the 15-year fixed-rate mortgage averaged 5.89%.
“Inching up to just shy of seven percent, mortgage rates reached their highest point in nearly six months,” Sam Khater, Freddie Mac’s chief economist, says. “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.”
While more buyers may come off the sidelines in the new year, data from the Mortgage Bankers Association (MBA) indicates there was a significant decline in mortgage applications to end 2024. Mortgage applications decreased 21.9% for the week ending Dec. 27 compared to the period two weeks prior, according to the Mortgage Application Survey from the MBA.
The holiday-adjusted refinance index decreased 36% from two weeks prior, though was 10% higher than the same week in 2023. The MBA’s seasonally adjusted purchase index for the week ending Dec. 27 decreased 13% compared with two weeks ago.
“Mortgage rates moved higher through the last full week of 2024, reaching almost 7% for 30-year fixed-rate loans,” says Mike Fratantoni, MBA’s senior vice president and 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.”
The refinance share of mortgage activity decreased to 39.4% of total applications for the week ending Dec. 27, 2024, down from 44.3% the previous week. The adjustable-rate mortgage share of activity decreased to 5.2% of total applications.
While rates continue their upward climb, data from Redfin indicates that home shoppers are likely to have more options should they elect to come off the sidelines in the new year. According to the organization, new listings increased 8% year-over-year during the four weeks ending Dec. 29. During the same period, the total number of homes for sale rose 10% compared to the same four-week range in 2023.
