Affordability hits a wall as rates climb--investors need a new strategy for navigating this challenging market

After dipping for two days, 30-year mortgage rates edged higher, again nearing their highest level since early July. Rate movement was mixed for other loan types.

According to Freddie Mac’s Primary Mortgage Market Survey (PMMS ®), as of January 2, 2025, mortgage rates have surged to their highest point in nearly six months, with the 30-year fixed-rate mortgage (FRM) averaging 6.

US mortgage rates climbed closer to 7%, threatening to squeeze buyers trying to crack into the housing market.Most Read from BloombergIs This Weird Dome the Future of Watching Sports?NYPD Seeking Gunmen After 10 People Wounded Outside Queens VenueDetroit’s Michigan Central Is the Building Revival Story of 2024Burned Out Parents Need Better Public SpacesA Commuting Resolution for 2025: Ride Your Local Subway or BusThe average on a 30-year mortgage rose to 6.

“Inching up to just shy of 7%, mortgage rates reached their highest point in nearly six months,” said Sam Khater, Freddie Mac’s chief economist. “Compared to this time last year, rates are elevated and the market’s affordability headwinds persist. However, buyers appear to be more inclined to get off the sidelines as pending home sales rise.”

Mortgage rates inched up at the start of the year to the highest level in nearly six months, portending another tough year for the U.S. housing market. The 30-year mortgage rate remains at the highest level since July 2024.

The average rate for a 30-year mortgage climbed to 6.91 percent from 6.58 last week, mortgage buyer Freddie Mac said Thursday.

Mortgage rates climbed again for a third consecutive week to the since since July, with the 30-year fixed-rate average rising to just under 7% as the housing market remains stalled.