As 2024 draws to a close, mortgage rates are on the rise again. The average 30-year fixed-rate mortgage is now just below 7%, the highest it's been in six months. This increase comes despite the Federal Reserve's recent rate cut. The central bank, however, is less optimistic about further cuts this year due to persistent inflation and a strong job market. Mortgage rates closely follow the 10-year US Treasury yields, which have been climbing due to the Fed's revised outlook and growing government debt.

Sam Khater, Freddie Mac's chief economist, noted that rates are higher than last year, keeping affordability a challenge. This has led to a 21. 9% drop in mortgage applications over the past two weeks. Mike Fratantoni, chief economist at the Mortgage Bankers Association, explained that this decrease is typical during the holiday season.

The year 2024 started with hope that Fed rate cuts would lower mortgage rates and bring more homes to the market. However, inflation spikes and a late start to rate cuts have kept mortgage rates high. This has resulted in a housing market similar to last year, with wealthier and older Americans driving most of the activity. The median existing-home sales price hit $406, 100 in November, a 17th consecutive month of year-over-year increases.

Home Loan Costs Creep Toward 7% as 2024 Ends

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