As of January 24, 2025, mortgage rates have experienced a slight decline after a period of consistent increases. The average rate for a 30-year fixed mortgage has decreased to 6.96%, down from 7.04% the previous week. Similarly, the 15-year fixed mortgage rate has dipped to 6.16% from 6.27%. (Freddie Mac – We Make Home Possible)
This recent decrease in mortgage rates is attributed to a decline in bond yields, particularly the U.S. 10-year Treasury yield. Mortgage rates are closely tied to these yields, and as they fall, borrowing costs for homebuyers tend to decrease as well. (AP News)
Despite this positive development, affordability challenges persist in the housing market. Elevated mortgage rates have contributed to higher housing costs, discouraging potential homebuyers and extending a national home sales slump that began in 2022. Although home sales saw a brief rise, the housing market is nearing its worst year since 1995. (AP News)
In December 2024, existing home sales in the U.S. reached a 10-month high, increasing by 2.2% to a seasonally adjusted annual rate of 4.24 million units. However, the total number of homes sold in 2024 was 4.06 million, marking the lowest level since 1995. Economists predict that existing home sales will remain weak during the first half of 2025, with mortgage rates expected to decrease slightly. (Reuters)
For prospective homebuyers, the recent dip in mortgage rates may offer a slight reprieve. However, it’s essential to remain cautious, as the housing market continues to face challenges related to affordability and inventory shortages. Staying informed about rate trends and consulting with financial advisors can help individuals make well-informed decisions in this evolving landscape.
