Mortgage Rates Hit Six-Month High

According to Freddie Mac’s Primary Mortgage Market Survey (PMMS ®), as of January 2, 2025, mortgage rates have surged to their highest point in nearly six months, with the 30-year fixed-rate mortgage (FRM) averaging 6.91%.

This marks an increase from the previous week's rate of 6.85% and is significantly higher than the 6.62% rate recorded at the same time last year. The 15-year FRM also saw a rise, climbing to 6.13% from 6.0% the previous week.

Freddie Mac Chief Economist, Sam Khater, noted that while mortgage rates are still still up from the previous year, the market is showing signs of resilience.

"Inching up to just shy of seven percent, mortgage rates reached their highest point in nearly six months. Compared to this time last year, rates are elevated, and the market’s affordability headwinds persist," Khater said. "However, buyers appear to be more inclined to get off the sidelines as pending home sales rise."

Despite the ongoing affordability challenges caused by higher mortgage rates, the housing market is seeing a surprising uptick in activity.

Barring a recent seasonal slump, in which mortgage applications fell 21.9%, home sales have begun to rise, indicating that potential buyers are still willing to engage in the market, even as borrowing costs climb.

While mortgage rates may pose challenges for homebuyers, the market remains active, with a noticeable number of individuals still pursuing homeownership despite the economic pressures at play.