By Diana Olick | CNBC
A sharp rise in mortgage interest rates toward the end of December took its toll on mortgage demand, hitting just as the housing market entered its typically slowest stretch of the year.
Total mortgage application volume for the two weeks ended Dec. 27, 2024, dropped 21.9% compared with the week before that period, according to the Mortgage Bankers Association’s seasonally adjusted index. An additional adjustment was made to account for the Christmas holiday. The MBA released two weeks of data after being closed over the holiday.
During that time, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less increased to 6.97% from 6.89%, with points rising to 0.72 from 0.67, including the origination fee, for loans with a 20% down payment. Mortgage rates, which had been lower than the previous year for much of 2024, were 21 basis points higher annually.
“Mortgage rates moved higher through the last full week of 2024, reaching almost 7% for 30-year fixed-rate loans,” said Mike Fratantoni, chief economist at the MBA. “Not surprisingly, this increase in rates — at a time when housing activity typically grinds to a halt — resulted in declines in both refinance and purchase applications.”
