Mortgage rates start 2025 near 7%, hitting highest level since July
Published On Jan 2, 2025, 12:00 PM
Mortgage rates have risen to an average of 6.91% for a 30-year fixed mortgage, the highest level since July 2024. This increase, which marks the third consecutive week of rising rates, can affect housing market affordability, leading to a decrease in mortgage applications and impacting potential buyers. Despite the high rates, some signs indicate that certain buyers are still engaging in home purchases, with housing contract signings increasing in November 2024. The overall trend reflects significant challenges in affordability in the housing market.
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The increase in mortgage rates generally signals a decline in home affordability, which typically leads to reduced demand for new mortgages and can negatively impact housing market activity. Given that higher rates may deter buyers, leading to slower sales and potentially affecting real estate-focused investments, this trend could put downward pressure on stocks related to housing and mortgages.
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