What happened to mortgage rates this week
The Freddie Mac rate for a 30-year mortgage fell by 8 basis points this week, to 6.96%, dipping back below 7% after coming in at 7.04% last week. The rate, which finally dropped after five straight weeks of increases, still exceeds one year ago, when it was 6.69%. The 10-year Treasury yield has leveled out since its surge in the first half of January, and we are seeing mortgage rates do the same as debt market investors gain some steadier footing in the early days of the new Trump administration, which has housing affordability at the forefront of the agenda.
What it means for the housing market
Falling mortgage rates are welcome news in a housing market that has been largely stymied by them in recent years. Momentum in the market started to build toward the end of 2024, as evidenced by the increase in pending home sales year over year in November, but rates exceeding 7% last week for the first time since May 2024 will surely gum up the gears going forward. This week’s release from Freddie Mac will hopefully calm the fears of prospective buyers who had watched mortgage rates climb for five consecutive weeks, encouraging them that more stability is ahead. At the same time, buyers have more options to choose from since before the COVID-19 pandemic, as for-sale inventory continues to recover, especially in the South and West.