Mortgage rates peak at 7%, hitting a maximum of seven months. But relief may be in sight

Mortgage rates rose this week to the highest level since May 2024 during a volatile period for closely followed bonds.
The average 30-year mortgage rate jumped to 7.04% as of Wednesday, from 6.93% a week earlier, after strong jobs data pushed yields higher on Treasury bonds that are more closely linked to mortgage rates. Average 15-year mortgage rates also rose to 6.27%, from 6.14%, according to Freddie Mac.
The latest rate hike came after the December jobs report showed the U.S. added 256,000 jobs that month, far more than expected. U strong hiring data caused traders to reassess their expectations for Federal Reserve rate cuts this year and sparked a sharp rise in bond yields.
“The underlying strength of the economy is contributing to this rate hike,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
It is the fifth week in a row that mortgage rates have increased. But in the coming days, prospective home buyers may get some relief: Treasury yields have fallen sharply after a The key inflation metric eased for the first time since July. At noon Thursday, the 10-year Treasury yielded 4.61%, down from 4.79% on Tuesday.
Mortgage rates move primarily based on expectations about the path of benchmark interest rates set by the Fed. Traders now also see chances that the Fed will cut interest rates by May, up from a probability of about 30% earlier this week, according to CME FedWatch data.
“There are more wild cards than normal this year,” said Danielle Hale, chief economist at Realtor.com, adding that the new Congress and the unknowns surrounding President-elect Donald Trump’s return to office are probably weigh taxes. “I’m confident that some of the uncertainty will subside, and that will help mortgage rates settle down a bit.”
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2025-01-16 17:00:00