After a brief pause, mortgage rates resumed their climb this week, rising to the highest level since mid-July, as the bond markets remain elevated on inflation expectations.
The 30-year fixed-rate mortgage averaged 6.84% on Nov. 21, up 6 basis points from last week’s 6.78%. Rates are still lower than they were a year ago at this time, when the average was 7.29%.
At the same time, the 15-year FRM was at 6.02%, a gain of 3 basis points from Nov. 14. A year ago at this time, it averaged 6.67%.
“Heading into the holidays, purchase demand remains in the doldrums,” said Freddie Mac Chief Economist Sam Khater. “While for-sale inventory is increasing modestly, the elevated interest rate environment has caused new construction to soften.”
A pair of recent home sales indicators were more positive on the current market.
Redfin’s Homebuyer Demand Index rose 17% year-over-year for the week ended Nov. 17, and it’s now at its highest level since August 2023.
This metric measures consumers asking for tours and other home buying services from Redfin agents.
“The burst of buyers and sellers jumping into the market is the result of pent-up demand from people who were waiting for the election to pass, and for the Fed to cut interest rates a second time,” said Redfin Economic Research Lead Chen Zhao in a press release.
“Even though mortgage rates have been rising since both of those things happened, house hunters who had pressed pause are jumping back in,” Zhao continued. “Now we’re keeping a close eye on whether this is a short post-election boom, or if it translates into a steady improvement in pending sales.”
Meanwhile, the National Association of Realtors October existing home sales report found transactions were up because of the brief mortgage rate dip in September.
But the positive trend is not expected to last, as Fannie Mae significantly reduced its 2025 outlook for existing home sales, and dropped its mortgage origination forecast as a result.
The housing market is set for its worst year in 2024 in more than a decade and so it has nowhere to go but up, Corelogic principal economist Molly Boesel said in a statement on the NAR report.
“However, stubbornly high mortgage rates and strong home prices will continue to weigh down on the housing recovery,” Boesel continued. “Any potential thaw in the housing market will likely happen only after the pending winter months.”
Zillow’s rate tracker increased 6 basis points as of 11 a.m. Thursday morning, to 6.63% from the previous week average of 5.57%.
Meanwhile the 10-year Treasury yield was at 4.41% as of 11 a.m. this morning, slightly higher than it was at the same time last week.
