Mortgage rates climbed for the fifth consecutive week, crossing the 7% barrier as of Jan. 16 to average 7.04% for the 30-year fixed-rate mortgage, according to Freddie Mac.
The 30-year mortgage reached 7% for the first time in eight months, rising from 6.93% last week. A year ago at this time, the 30-year mortgage averaged 6.6%. The 15-year fixed-rate mortgage averaged 6.27% as of Jan. 16, up from last week’s average of 6.14%. Twelve months ago, the 15-year mortgage averaged 5.76%
“Mortgage rates ticked up for the fifth consecutive week and crossed 7% for the first time since May of 2024,” said Sam Khater, Freddie Mac’s chief economist. “The underlying strength of the economy is contributing to this increase in rates. Despite rising rates, Freddie Mac research highlights that consumers can save money if they shop for several different lender quotes.”
CoreLogic Chief Economist Selma Hepp pointed to how quickly optimism on declining rates has vanished.
“Only six months ago, many predicted that interest rates would be reduced slowly through 2025 and mortgage rates would reach the mid- to high-5% range,” Hepp said in a statement. “But that outlook has changed tremendously. We expect the Fed to be even more incremental as it continues to battle inflation, to the tune of possibly no rate cuts through the year, with mortgage rates remaining at 7%-plus.”
Mortgage rates also are influenced by the yield on 10-year Treasury bonds, and move higher as yields move higher. In recent months, yields have been trending up due to worries about a strong economy and Trump administration policies causing inflation to rise.
For instance, yields were at 3.642% on Sept. 16. Ten days later, the 30-year mortgage fell to 6.08%, the lowest level for 2024. On Jan. 9, the 10-year Treasury closed at a 12-month high point of 4.774%. Seven days later, mortgage rates reached 7.04%.
However, better times may lie ahead. In recent days, the yield has begun falling after two inflation gauges showed prices are increasing, but within target ranges. The 10-year Treasury yield has fallen about 0.16% in the past week and stood at about 4.61% at midday on Thursday, Jan. 16.