OAN Staff James Meyers
3:30 PM – Thursday, January 16, 2025
According to a new report, mortgage rates increased this week, going above 7% ━ adding more pressure to the housing market.
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Freddie Mac’s latest Primary Mortgage Market Survey, released on Thursday, showed that the average rate on the benchmark 30-year fixed mortgage jumped to 7.04%, which is up from last week’s 6.93%. The average rate on a 30-year loan was 6.60% a year ago.
The latest jump comes after 10-year Treasury yields, which mirror mortgage rates, rose faster. New economic data released this week pointed to an increase in inflation and more job openings, which complicates the Fed’s rate-cutting path.
“Mortgage rates ticked up for the fifth consecutive week and crossed seven percent for the first time since May of 2024,” said Sam Khater, Freddie Mac’s chief economist. “The underlying strength of the economy is contributing to this increase in rates.”
Meanwhile, the average rate on the 15-year fixed mortgage climbed to 6.27% from 6.14% last week. Only one year ago, the rate on the 15-year fixed note averaged 5.76%.
In addition to elevated borrowing costs, homebuyers are also contending with home prices that are hovering around all-time highs; and in some regions, surging home insurance premiums.
Economists say that they expect the housing market to not improve much this year, as mortgage rates will likely remain above 6% through 2026. If accurate, this will make it even tougher for first-time buyers and low-income households living in metropolitan areas.
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