Mortgage Rates Rise to 6.72% Amid ‘End-of-the-Year Uptick in Activity’

by Julie Taylor

Mortgage rates ticked up from 6.6% last week to 6.72% for a 30-year fixed home loan for the week ending Dec. 19, according to Freddie Mac.

“This week, mortgage rates crept up to a similar average as this time in 2023,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “For the most part, mortgage rates have moved between 6 and 7 percent over the last 12 months. Homebuyers are slowly digesting these higher rates and are gradually willing to move forward with buying a home, resulting in additional purchase activity.”

Indeed, despite stubborn interest rates, the housing market is not stuck in its usual December deep freeze.

“We see some indicators possibly reflecting an end-of-the-year uptick in activity as both buyers and sellers look to close on the purchase or sale of a home before the new year,” explains Realtor.com® senior economist Ralph McLaughlin in his analysis.

With the holidays just around the corner, here’s a snapshot of the latest housing market data and what it means for homebuyers and sellers in the latest installment of our Weekly Housing Market Update.

The Federal Reserve cuts rates

The Freddie Mac rate for a 30-year mortgage moved slightly higher this week as markets reacted to Wednesday’s Federal Reserve meeting.

“The Federal Reserve’s Open Market Committee cut the federal funds rate 25 basis points, falling in line with market expectations,” says Realtor.com senior economic research analyst Hannah Jones.

Because investors had anticipated the Fed’s recent rate cut, it has already been factored into the long-term bond markets, which are the primary drivers of mortgage interest rates.

Consequently, the latest rate adjustment is unlikely to trigger sharp changes in mortgage rates.

The housing market outlook for 2025

The Realtor.com economic research team projects that mortgage rates will average 6.3% through 2025 and end the year at around 6.2%.

“Generally, we expect mortgage rates to ease and home prices to tick higher in the coming year, resulting in very little, if any, change in the cost to purchase a home,” says Jones.

Yet buyers in many areas, including the 2025 top markets, will be in a more favorable position as more new and existing homes are listed for sale.

However, even though 2025’s housing market is expected to be the most buyer-friendly since 2016, “it will not cross into buyer’s-market territory,” according to Jones.

She says sellers will also be in a good position next year since household real estate equity remains near last quarter’s record-high of roughly $266,000 for existing homeowners.

Prices take a tumble

While home prices may rise next year, buyers hoping to snag a home before year’s end have some good news.

The median listing price fell by 1.2% year over year for the week ending Dec. 14. (The median home price was $416,880 in November.)

This marks the 29th week in a row in which the national median home listing price was down or remained flat from the corresponding week last year.

However, that listing price does come with an asterisk.

When a change in the mix of inventory toward smaller homes is accounted for, “the median listing price per square foot increased by 1.4% this week compared with the same time last year,” says McLaughlin.

Housing stock is up

New listings shot up for the week ending Dec. 14 by 7.9%, giving buyers an unusually high number of fresh homes to tour.

Indeed, the past two weeks have brought the highest combined two-week increase in new listings since April.

This reflects “a rising desire of existing home sellers to sell their home and, in many cases, also buy a new one,” explains McLaughlin.

This late-season increase could lead to a noticeable but modest spike in housing market activity throughout the remainder of the year.

Overall, buyers had more homes to choose from in the week ending Dec. 14, with 23.4% more homes on the market than the same week a year ago, marking 58 straight weeks of housing stock growth.

“This increase should help lead to a more balanced housing market heading into 2025,” explains McLaughlin.

Pace of homes slows down

Homes lingered on the market seven days longer for the week ending Dec. 14 compared with this time last year. (The typical home spent 62 days on the market in November, the slowest November in five years.)

However, “this is down from eight days last week and is the lowest year-over-year change since September, when rates bottomed out,” explains McLaughlin. “This trend could be due to the relatively small but recent downward trend in mortgage rates.”

Even so, “buyers are taking their time,” he adds.

Mortgage Rates Rise to 6.72% Amid &#8216;End-of-the-Year Uptick in Activity&#8217;