(Bloomberg) — US mortgage rates climbed to an almost six-month high during the Christmas holiday week, suppressing applications for home purchases and severely undercutting refinancing activity.
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The contract rate on a 30-year mortgage advanced 8 basis points to 6.97% in the period ended Dec. 27 after rising 14 basis points the previous week, according to Mortgage Bankers Association data released Thursday.
The group’s index of home-purchase applications slid nearly 7% to the lowest level since mid-November. The refinancing gauge slumped more than 23% to a one-year low. While the figures are adjusted for seasonal effects, they are still prone to wide swings around the year-end holidays.
Mortgage rates track Treasury yields, which continued to climb in late December after Federal Reserve policymakers projected a slower pace of interest-rate cuts in 2025 amid sticky inflation. Mortgage News Daily, which updates home financing costs more frequently, put the 30-year fixed rate at 7.07% on Tuesday.
Despite the end-of-year rise in mortgage rates, separate data from the National Association of Realtors showed prospective homebuyers are growing more accustomed to a higher rate environment. In November, when rates averaged about 6.8%, a gauge of contract signings for purchases of previously owned homes advanced to the highest level since February 2023.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.
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