Mortgage Rates Near Six-Month Peak As Bidenomics Burns Through American Buying Power

U.S. mortgage rates rose to an almost six-month high toward the end of 2024, according to the Mortgage Bankers Association (MBA).

In the waning days of President Joe Biden’s term, the recent surge in mortgage rates rounds out four years of inflated home prices and high rates that have boxed out many first time home buyers. The average interest rate for 30-year fixed-rate mortgages with loan balances of $766,550 or less jumped to 6.97% over a one week period ending Dec. 27, 2024, which is up from 6.89% the week prior, resulting in a suppressed volume of mortgage applications, according to a Thursday press release from MBA.

The average interest rate for 15-year fixed-rate mortgages also increased in the same period, rising from 6.37% to 6.43%, according to the MBA, marking the highest U.S. mortgage rate since early July 2024, when the average 30-year fixed mortgage rate was 6.95%, according to Federal Reserve Economic Data (FRED).

“Mortgage rates moved higher through the last full week of 2024, reaching almost 7 percent for 30-year fixed-rate loans,” Mike Fratantoni, MBA’s SVP and chief economist, said in the press release. “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.”

Mortgage balances also shot up by $75 billion from the second quarter of 2024, reaching $12.59 trillion at the end of September, according to a report from the Federal Reserve Bank of New York. The 30-year fixed mortgage rate climbed to 7.07% on Tuesday, according to a report from Mortgage News Daily.

The median sales price for an existing-home also increased to $406,100 in November 2024, up 4.7% from November 2023, according to a December 2024 report from the National Association of Realtors (NAR). This marked the 17th consecutive month of year-over-year price increases, according to the NAR.

Housing prices have remainedsignificantly high throughout much of Biden’s presidency compared to costs during President-elect Donald Trump’s first term. Since Biden took office, the median price of homes in the U.S. surged by an unprecedented 18% in 2021, according to Statista. Under Biden, the median sales price of a house spiked in the fourth quarter of 2022 to $442,600. In comparison, the highest median home price under Trump was just $337,900 in the fourth quarter of 2017, which is lower than the best median home price under Biden, which occurred in the first quarter of 2021 when the median cost was $355,000.

Mortgage interest rates dropped to historically low levels during the COVID-19 pandemic, reaching 2.65% in January 2021, due to the Federal Reserve’s emergency response, though the rates have steadily increased since, according to the Consumer Financial Protection Bureau. Evidence suggests the low mortgage rates that occurred during the early days of the pandemic are unlikely to return.

During Trump’s final year in office, the 30-year fixed average for mortgage rates was 3.10%, according to The Mortgage Reports, while during Biden’s term, mortgage rates hit their cycle-high of 7.8% in October 2023.

Many Americans have been facing financial strain amid stubborn inflation throughout Biden’s presidency. Although inflation has eased some since its 9.1% peak in June 2022, it has remained above the Federal Reserve’s target range.

The consumer price index, a broad measure of the price of everyday goods, rose 2.7% from a year earlier in November 2024, up from 2.6% in the previous month, according to the Bureau of Labor Statistics. Some experts have attributed the high inflation rates to the massive government spending under the Biden-Harris administration.

All content created by the 🏢Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.