T
he 30-year fixed-rate mortgage averaged 6.93% in Freddie Mac's latest survey, a slight increase from the previous week's 6.91%. This comes as no surprise given the continued strength of the economy and high home prices, which are impacting housing affordability. The lack of entry-level supply is also a concern for first-time homeowners.

    Mortgage rates may see some volatility in the coming days due to upcoming labor market reports, including employment and wage numbers scheduled for release on Friday. A strong but not too strong employment report could help settle economic uncertainty, while convincing evidence of cooling job growth and easing inflation will be key to bringing mortgage rates lower.

    The housing market softened more than usual in December, with inventory up 22% compared to a year earlier but still below prepandemic levels. Many active listings have grown stale, spending an average of 70 days on the market last month – the slowest December in five years.

    Mortgage applications have slowed down, with overall applications down 3.7% from the previous week and purchase applications declining by 15% compared to the same week a year ago. However, refinance applications increased despite higher rates, driven by an increase in VA refinances.

    Despite rising mortgage rates, homebuyers remain interested, with home tour activity ticking up modestly to kick off 2025. Several factors may be behind this uptick, including buyers accepting higher rates as the new normal and more homes listed for sale compared to recent years.