Mortgage rates climb, 30-year still below 7%

Current mortgage rates

The 30-year fixed mortgages in this week’s survey had an average total of 0.26 discount and origination points. Discount points are a way for you to reduce your mortgage rate, while origination points are fees lenders charge to create, review and process your loan.

Monthly mortgage payment at today’s rates

The national median family income for 2024 is $97,800, according to the U.S. Department of Housing and Urban Development, and the median price of an existing home sold in October 2024 was $407,200, according to the National Association of Realtors. Based on a 20 percent down payment and a 6.91 percent mortgage rate, the monthly payment of $2,148 amounts to 26 percent of the typical family’s monthly income.

How much lower can mortgage rates go?

Fixed mortgage rates are not set directly by the Fed, but by investor appetite, particularly for 10-year Treasury bonds. The 30-year fixed-rate mortgage rate moves with the yield on 10-year Treasury bonds.

“The 30-year mortgage rates are tied to the 10-year Treasury bonds, and long-term Treasury bonds have been increasing. Therefore, residential loan rates haven’t been falling as much as people have expected,” says Calixto Garcia-Velez, president and CEO at BanescoUSA in Miami.

When there’s uncertainty in the market, investors buy Treasury bonds, which in turn drives yields — and, often, mortgage rates — downward. However, Treasury yields have been rising as inflation remains stubbornly persistent.

Meanwhile, housing economists and mortgage players have seized on a new narrative — that four more years of President-elect Donald Trump will mean ever-growing deficits, and that those deficits will put upward pressure on 10-year Treasury yields and, in turn, mortgage rates.

Then there’s the Federal Reserve. Lenders and mortgage investors had been anticipating the Fed’s rate cuts in September, November and December, and economic indicators such as hiring have shown signs of strength. Mortgage rates are up half a percentage point since the Fed’s September rate cut.

“Despite the cuts to the short-term interest rates by the Federal Reserve, mortgage rates have largely refused to budge,” says Lawrence Yun, chief economist at the National Association of Realtors.

In its 2025 forecast released last week, Bright MLS said it expects rates to stay above 6 percent throughout the year before settling at 6.25 percent in the fourth quarter. Real estate brokerage Redfin also released its 2025 forecast this month, and it has an even less hopeful outlook: It expects mortgage rates to be in the 6.8 percent range a year from now. “Tariffs could be inflationary, and enacting more tax cuts would increase the U.S. deficit, both of which would push mortgage rates up,” Redfin predicted.

• Methodology

  The Bankrate.com national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. Our rates differ from other national surveys, in particular Freddie Mac’s weekly published rates. Each week Freddie Mac surveys lenders on the rates and points based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent. “Lenders surveyed each week are a mix of lender types — thrifts, credit unions, commercial banks and mortgage lending companies — is roughly proportional to the level of mortgage business that each type commands nationwide,” according to Freddie Mac.