But Freddie Mac economist outlines positive signs for the housing and mortgage markets
Mortgage rates haven climbed for the third week in a row, hitting 6.26% as hopeful homebuyers contend with another jump in borrowing costs.
Freddie Mac said Thursday that the average 30-year fixed-rate US mortgage rose from 6.24% in the week ending November 20, although the mortgage giant’s chief economist Sam Khater described that as a good sign for the housing market.
“Mortgage rates have been shifting within a narrow 10-basis-point range over the last month,” he said in prepared remarks. “This rate stability is a positive sign for both buyers and sellers, as it helps provide greater certainty in the housing market.”
That 30-year average is significantly lower than the same time last year, when it hovered around 6.84%. The 15-year fixed rate currently sits at 5.54%, higher than its average of 5.49% last week but down from last year’s level of 6.02%.
The steady decline in rates over the past 12 months has seen some life return to the US housing market, although plenty of buyers are still on the sidelines amid continuing affordability challenges.
The National Association of Realtors (NAR) said this week that existing-home sales were up 1.2% last month, accelerating to a seasonally adjusted annual clip of 4.1 million units and posting their best performance since February.
Still, while rates aren’t expected to tumble anytime soon. Freddie’s fellow government-sponsored enterprise (GSE) Fannie Mae sees an average 30-year rate of 6.4% by the end of 2025, sliding to 5.9% by late 2026.
But NAR still expects a big jump in housing market activity next year, forecasting a rise in existing-home sales to 14% in 2026.
“Next year is really the year that we will see a measurable increase in sales,” Lawrence Yun, the association’s chief economist, said last week. “Home prices nationwide are in no danger of declining.”
That’s partly because of the expectation of a small drop in mortgage rates. “It’s not going to be a big decline,” Yun said, “but it will be a modest decline that will improve affordability.”
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