Mortgage Rates Remain Stable Despite Market Turmoil
Despite a sharp sell-off in the stock market, mortgage rates have remained largely unchanged this week. According to Freddie Mac, the average 30-year mortgage rate currently stands at 6.95%, while 15-year rates have decreased slightly to 6.12%.
The steady rates come even after a market-wide sell-off on Monday, triggered by the release of a new artificial intelligence model from the Chinese startup DeepSeek. Investors flocked to safe-haven assets like US Treasurys, which sent yields lower and consequently influenced mortgage rates.
"Driven by higher rates and a persistent supply shortage, affordability challenges remain for many homebuyers," explained Sam Khater, Freddie Mac's chief economist.
Despite the recent volatility, economists anticipate that mortgage rates will remain stable in the foreseeable future. The Federal Reserve's decision to hold off on further benchmark interest rate cuts to assess inflation supports this outlook.
"With the Fed on hold, we do expect that longer-term rates, including mortgage rates, will also stay within a narrow range for the foreseeable future," said Mike Fratantoni, chief economist for the Mortgage Bankers Association.
Rising rates are impacting housing market activity, with contract activity falling 5.5% in December from the previous month, as reported by the National Association of Realtors. The decline is particularly evident in high-priced markets like the West and the Northeast.
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