Lisa Mailhot | January 14, 2025
Buyers
As we step into the new year, rising mortgage rates are putting the brakes on market activity. With 30-year fixed rates nearing 7%, the Mortgage Bankers Association (MBA) reports that purchase applications have dropped to their slowest pace since February 2024.
Joel Kan, MBA Deputy Chief Economist, highlights that higher rates are discouraging buyers, stating:
“Applications decreased last week as rising mortgage rates continued to discourage buyers from entering the market.”
Since hitting a 2024 low of 6.03% in September, rates have climbed nearly a full percentage point. Factors contributing to this increase include:
Surveys by Fannie Mae show Americans are slightly more optimistic about the economy compared to last year. However, only 20% of respondents in December believed it was a good time to buy a home. Rising prices and high mortgage rates remain significant barriers, particularly for first-time buyers.
Despite a challenging start, experts see room for optimism:
While rising rates have cooled mortgage demand, the long-term outlook offers hope for stability. Whether you're planning to buy, sell, or simply stay informed, understanding these trends is key. Ready to explore your options in the 2025 market? Let’s talk and find the right strategy for you!
Reference: Carter, Matt. "Mortgage Demand Crumbles as Rates Are on the Rise Again." Inman, January 8, 2025.
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