Mortgage rates last week reached their highest levels since July 2024 with the average 30-year fixed mortgage rate staying above 7%, according to Bankrate. Experts see rates remaining elevated through the first six months of 2025.
The Details: Mortgage rates have climbed higher following recent economic data which has dampened Wall Street's expectations for the Federal Reserve to cut rates in the near future and caused 10-year Treasury yields to surge.
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Mortgage applications are down as high interest rates continue to deter potential homebuyers. According to the most recent data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey, mortgage applications decreased 3.7% last week.
"Applications decreased last week as rising mortgage rates continued to discourage buyers from entering the market and put a damper on purchase activity. The 30-year fixed rate increased for the fourth consecutive week, reaching 6.99 percent — the highest rate since July 2024," said Joel Kan, MBA's vice president and deputy chief economist.
What To Expect: Zillow expects more home sales and modest home value growth of 2.6% in 2025 as the market "slowly becomes unstuck." Zillow forecasts 4.3 million existing home sales in 2025, up slightly from 4.1 million in 2023 and a projected 4 million in 2024.
But, most experts see mortgage rates remaining close to the 7% level in the near term as markets digest uncertainty about the incoming Trump administration's policies which some think could reignite inflation.
"As for whether or not we’ll see recalibration over the next few weeks, that depends on what the president-elect says and what he does when he actually takes office,” said Jacob Channel, senior economist at LendingTree as reported by CNET.
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