Mortgage rates topped 7%, a 7-month high. But relief can be seen.
Mortgage rates rose this week to their highest level since May 2024 amid volatile times for bonds.
The average 30-year mortgage rate rose to 7.04% from 6.93% a week earlier after strong employment data pushed up products more closely tied to mortgage rates than Treasury bonds. The average 15-year mortgage rate also rose to 6.27% from 6.14% at Freddie Mac.
The latest jump in prices came after the December jobs report showed that the US added 256,000 jobs that month, more than expected. The strong employment data prompted traders to reassess their expectations for a rate cut by the Federal Reserve this year and led to a sharp rise in bond yields.
“Fundamental strength in the economy is contributing to these price increases,” Freddie Mac Chief Economist Sam Khatter said in a statement.
Read more: Mortgage and Refinance Rates Today, January 16, 2025: Rates are up again, but this trend could change
It’s the fifth straight week that mortgage rates have risen. But in the coming days, homebuyers may find some relief: Treasury yields fell sharply after a key measure of inflation fell for the first time since July. As of midday Thursday, the 10-year Treasury yield was 4.61%, down from 4.79% on Tuesday.
Mortgage rates are driven primarily by expectations of benchmark interest rates set by the Fed. According to CME FedWatch data, traders see even odds of a rate cut in May with a roughly 30% chance earlier this week.
“There are more wild cards this year than usual,” said Danielle Hale, chief economist for Realtor.com. The new Congress and the unknowns of President-elect Donald Trump’s return to office will likely weigh on rates, he said. I’m sure some of the uncertainty will calm down, and that will help mortgage rates settle down a bit.
Read more: Is this a good time to buy a house?
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages and home insurance.
Click here for real estate and housing market news, reports and analysis to inform your investment decisions
Read the latest financial and business news from Yahoo Finance
