The average interest rate for a 30-year mortgage rose for the fourth consecutive week, according to Freddie Mac's weekly Primary Mortgage Market Survey.
The 30-year, fixed-rate mortgage loan averaged 6.93 percent for the week ending January 9, 2025, up from 6.91 percent the prior week. The 30-year note averaged 6.66 percent a year ago.
"The continued strength of the economy has put upward pressure on mortgage rates, and along with high home prices, continues to impact housing affordability," Freddie Mac Chief Economist Sam Khater said. "The lack of entry-level supply also remains an issue, especially for those looking to become first-time homeowners."
Prospective Massachusetts home buyers with strong credit scores typically get mortgages with interest rates slightly below the national average.
The 15-year, fixed-rate mortgage loan averaged 6.14 percent from 6.13 percent the week before. A year ago, the 15-year mortgage averaged 5.87 percent.
The U.S. economy added 256,000 non-farm jobs in December, the Bureau of Labor Statistics reported on January 10, 2025, far surpassing the 153,000 new jobs expected. The unemployment rate fell slightly to 4.1 percent, and even long-term joblessness – those out of work for more than six months – fell to 1.6 million after rising in recent months.
Mortgage News Daily reported that the news quickly pushed mortgage interest rates to 7.24 percent by the end of the day, the highest level since May.
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The Mortgage Bankers Association (MBA) reported on January 8, 2025, that applications for a mortgage to purchase a home for the week ending January 3, 2025, fell 7 percent for the week and were 15 percent lower than the same week one year ago.
MBA senior vice president and chief economist Mark Fratantoni believes the hot jobs report may lead to higher mortgage rates.
"The December employment report is a picture of a strong job market. While the [Federal Open Market Committee] had indicated that they could slow the pace of rate cuts as we enter 2025, these data make at least a pause in cuts much more likely, which will push mortgage rates higher in the near term."
Despite the recent increase, it's almost always a mistake for home buyers to try to time interest rates. Prospective home buyers should ask themselves whether they can afford a home.
If interest rates rise after your home purchase, you will be glad you purchased when you did. If interest rates drop, you can likely refinance your home's mortgage.