Mortgage Rates Remain Steady Amid Market Turmoil

Mortgage rates have remained largely unchanged this week, despite a significant stock market decline that prompted investors to seek refuge in safe havens.

According to Freddie Mac, the average 30-year fixed mortgage rate stands at 6.95%, comparable to the previous week's 6.96%. 15-year fixed mortgage rates have marginally decreased to 6.12%, from 6.16%.

"Higher rates and ongoing inventory shortages continue to pose affordability challenges for homebuyers, with many remaining on the sidelines," said Sam Khater, Chief Economist at Freddie Mac.

Despite a market sell-off on Monday, rates remained stable. The decline in US technology stocks, driven by DeepSeek's release of an accessible artificial intelligence model, prompted investors to shift funds into assets like US Treasurys. Treasury yields, closely tied to mortgage rates, initially declined on Monday but recovered slightly on Wednesday after the Federal Reserve maintained its benchmark interest rate to monitor inflation.

"With the Fed's pause, we anticipate that long-term rates, including mortgage rates, will remain within a narrow range in the near future," said Mike Fratantoni, Chief Economist at the Mortgage Bankers Association.

Higher rates appear to be impacting sales, as housing contract activity fell 5.5% in December compared to the previous month, according to the National Association of Realtors. Premium markets in the West and Northeast experienced the most significant declines, with high rates reducing affordability.