Mortgage rates ended 2024 hovering back to within the vicinity of the 7% level, according to the Primary Mortgage Market Survey published by Freddie Mac (OTCQB: FMCC).
The 30-year fixed-rate mortgage averaged 6.85% as of Dec. 26, up from last week when it averaged 6.72%. A year ago at this time, it averaged 6.61%.
The 15-year fixed-rate mortgage averaged 6.0%, up from last week when it averaged 5.92%. A year ago at this time, it averaged 5.93%.
“Mortgage rates increased for the second straight week, rebounding after a decline from earlier this month,” said Sam Khater, Freddie Mac’s chief economist. “While a slight improvement in new and existing home sales is encouraging, the market remains plagued by an overwhelming undersupply of homes. A strong economy can help build momentum heading into the new year and potentially boost purchase activity.”
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Sam Khater has a built-in contradiction to his argument. Is this the best his group can come up with to explain why the cost of borrowing money is heading back up into the sixes. These semi-governmental entities control the higher interest rates, which have created a stagnant market “plagued” by “undersupply” and resulting in higher prices. Higher interest rates adversely impact both the profits of builders to build, and the motive for sellers to sell, to increase housing supply. The new Administration understands this, and should hopefully clean house, to be able to adjust the mortgage rate down to a level where our RE industry is again stimulated to grow.