Summary
Federal Home Loan Mortgage Corp (FMCC, Financial), commonly known as Freddie Mac, released its Primary Mortgage Market Survey® on January 2, 2025, revealing that the 30-year fixed-rate mortgage (FRM) has reached an average of 6.91 percent. This marks the highest rate in nearly six months, reflecting ongoing affordability challenges in the housing market. Despite these challenges, there is a noted increase in pending home sales, indicating a potential shift in buyer behavior.
Positive Aspects
- Pending home sales are on the rise, suggesting increased buyer activity despite higher rates.
- Freddie Mac continues to fulfill its mission of promoting liquidity, stability, and affordability in the housing market.
Negative Aspects
- The 30-year FRM has increased to 6.91 percent, the highest in nearly six months, posing affordability challenges.
- The 15-year FRM also saw an increase, averaging 6.13 percent, up from 6.0 percent the previous week.
Financial Analyst Perspective
From a financial analyst's viewpoint, the increase in mortgage rates could potentially slow down the housing market's momentum, as higher rates typically deter new buyers. However, the rise in pending home sales suggests that some buyers are willing to enter the market despite these challenges. This could indicate a resilient demand for housing, possibly driven by expectations of future rate increases or a limited housing supply.
Market Research Analyst Perspective
As a market research analyst, the current trends in mortgage rates highlight the ongoing volatility in the housing market. The increase in rates may lead to a shift in consumer behavior, with potential buyers rushing to secure mortgages before rates climb further. Additionally, the rise in pending home sales could reflect a strategic move by buyers to capitalize on current market conditions, despite the affordability headwinds.
Frequently Asked Questions
Q: What is the current average rate for a 30-year fixed-rate mortgage?
A: As of January 2, 2025, the 30-year FRM averaged 6.91 percent.
Q: How does the current 15-year FRM compare to last year?
A: The 15-year FRM averaged 6.13 percent, up from 5.89 percent a year ago.
Q: What is the focus of the Primary Mortgage Market Survey®?
A: The PMMS® focuses on conventional, conforming, fully amortizing home purchase loans for borrowers with excellent credit who put 20 percent down.
Read the original press release here.
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