Mortgage Rates Up To 6.93%

Mortgage rates increased last week as markets digested the FOMC’s December meeting minutes and housing remained constrained.

Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage rate averaged 6.93%, up from the week prior’s 6.91%.

A year ago at this time, the 30-year fixed-rate mortgage averaged 6.66%.

Fifteen-year rates also increased to 6.14% from 6.13%. A year ago at this time, they were at 5.87%.

“In the first full week of the new year, the 30-year fixed-rate mortgage remained elevated at just under 7%. The continued strength of the economy has put upward pressure on mortgage rates, and along with high home prices, continues to impact housing affordability,” said Sam Khater, Freddie Mac’s Chief Economist. 

“The lack of entry-level supply also remains an issue, especially for those looking to become first-time homeowners,” Khater added.

Inventory is improving in some parts of the country, but areas at high risk of climate catastrophes continue to experience problems.

As the Los Angeles fires continue to rage, 1,000 homes, schools, and businesses have already been destroyed, and 150,000 people have been told to evacuate. It will take years to rebuild.

The Central Bank is not expected to cut rates again this month. Minutes from last month’s meeting showed Federal Reserve officials expressing concern over incoming President Trump’s policies and their impact on inflation. 

“Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes read.

This is likely to translate to a slower reduction of the benchmark rate, affecting affordability for homebuyers.