US mortgage rates have surged to a six-month high, reaching 6.91%, according to Freddie Mac. This increase comes despite the Federal Reserve’s recent interest rate cuts and may signal that a recent surge in home sales is temporary.
The rise in mortgage rates is attributed to investor fears about President-elect Donald Trump’s proposed policies, including tax cuts, higher tariffs, and mass deportations, which could reignite inflation. Mortgage rates now track closely with 10-year Treasury yields, up from 6.62% last year during the same period.
While sales of previously owned homes surged to an eight-month high in November, rising mortgage rates may discourage some homeowners from putting their houses on the market. This reduction in inventory could further reduce affordability for prospective buyers.
Source: https://www.reuters.com/markets/us/us-30-year-fixed-rate-mortgage-flirts-with-7-2025-01-02