The 30-year fixed-rate mortgage has hovered in the mid- to upper-6% range, even as the Federal Reserve this week makes another cut to its short-term interest rates.
A graphic of a bar graph suggesting rising and lowering rates over time.
© koto_feja/ iStock/Getty Images Plus

Home buyers seem to be getting over the shock of mortgage rates in the mid- to upper-6% range. The 30-year fixed-rate mortgage averaged 6.72% this week, Freddie Mac reports. Despite the Federal Reserve’s recent rate cuts, that average has held steady.

Still, existing-home sales in November were up about 6% year over year, NAR reported Thursday. “Consumers may no longer be expecting the 3% to 4% mortgage rates from the COVID days,” Lawrence Yun, chief economist of the National Association of REALTORS®, said in a conference call Thursday announcing the latest uptick in existing-home sales. “With mortgage rates mostly stable … more homes available for sale … and job creation up, this is pushing home sales higher.”

Sam Khater, Freddie Mac’s chief economist, points out that rates have stayed in the 6% to 7% range for the past 12 months. “Home buyers are slowly digesting these higher rates and are gradually willing to move forward with buying a home,” he says.

“Consumers are getting used to the new normal,” Yun agrees, especially considering that the 50-year rate average is 7.7%.

But What About the Fed Cutting Rates?

The Federal Reserve voted on Wednesday to lower its short-term, benchmark interest rate by another quarter point, or 25 basis points—its third consecutive rate cut since September. The Fed also signaled that more rate cuts are likely in 2025.

However, mortgage rates have largely refused to budge as the Fed has cut rates, Yun says. The Fed’s interest rate is not directly tied to mortgage rates, which mostly follow Treasury yields.

NAR predicts that mortgage rates will average 6% for 2025, although Yun has said the trajectory of rates will greatly depend on inflation, the federal deficit and other economic pressures.

Mortgage Rates This Week

Freddie Mac reports the following national averages for mortgage rates for the week ending Dec. 19:

  • 30-year fixed-rate mortgages: averaged 6.72%, rising from last week’s 6.60% average. A year ago, 30-year rates averaged 6.67%. 
  • 15-year fixed-rate mortgages: averaged 5.92%, increasing from last week’s 5.84% average. Last year at this time, 15-year rates averaged 5.95%.
Advertisement