Mortgage rates start 2025 near 7%, reaching their highest level since July

Mortgage rates It rose again last week, bringing it close to 7% to start the year.

The average 30-year fixed-rate mortgage rose to 6.91% in the week through Wednesday, from 6.85% as of Dec. 26, according to Freddie Mac data. 15-year mortgage rates jumped to 6.13% from 6% the previous week.

“Mortgage rates are at nearly 7%, reaching their highest point in nearly six months,” Sam Khater, chief economist at Freddie Mac, said in a statement. “Compared to this time last year, prices are high and affordability headwinds persist in the market.”

It is the third straight week of interest rate gains and the highest level since July.

Read more: What determines mortgage rates? It’s complicated.

Factors such as high interest rates and soaring home prices that have kept many potential buyers out of the market show no sign of abating at the moment. But there are signs that some buyers are moving forward with home purchases despite affordability challenges: housing Contract signatures Interest rates rose in November to the highest level since early 2023, according to the National Association of Realtors.

Demand for mortgages in the last week of 2024 fell sharply, the result of a slowing holiday market and interest rates near 7%, according to the Mortgage Bankers Association.

New home purchase applications were down 13% through Friday compared to the previous two weeks, while refinancing applications were down 36%. The results include an adjustment for the Christmas holiday.

Late December is typically one of the slowest seasonal times for the housing market as buyers and sellers pause amid the holidays and cold weather.

Claire Boston is a senior reporter at Yahoo Finance covering housing, mortgages, and home insurance.

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