The average interest rate on a 30-year fixed-rate mortgage in the United States continued to rise as the end of 2024 approaches, reaching the highest level since mid-July.
Freddie Mac, a mortgage financing entity, reported on Thursday (December 26th) that the average interest rate on a 30-year fixed-rate mortgage in the US increased for the second consecutive week, rising from 6.72% last week to 6.85% this week, the highest level since the week of July 11th when it was 6.89%. This rate is also higher than the same period last year, which was 6.61%.
In September, the average interest rate on a 30-year fixed-rate mortgage had dropped to 6.08%, hitting a new low in two years, while in May, it had peaked at 7.22%.
Sam Khater, Chief Economist at Freddie Mac, said in a press release, “Although there has been a slight improvement in new and existing home sales, the market is still plagued by a severe shortage of housing supply.”
“Strong economic growth is expected to build momentum into the new year and could drive home buying activity,” Khater added.
The cost of borrowing for a 15-year fixed-rate mortgage also rose this week, which is popular among homeowners seeking to refinance at lower rates, with the average interest rate increasing from 5.92% last week to 6% this week. According to Freddie Mac, a year ago, the average interest rate for a 15-year fixed-rate mortgage was 5.93%.
Rising mortgage rates and increasing property prices have deterred many potential homebuyers. Despite the consecutive increase in existing home sales in November for the second month, the real estate market remains sluggish and may be heading towards its worst year since 1995.