Mortgage rates drift higher — but buyer activity picks up 

Mortgage continued to rise in the first full week of 2025, but upcoming labor reports could dictate where they go next.

The 30-year fixed-rate mortgage averaged 6.93% this week, according to the latest Freddie Mac survey. That's up just a smidge compared to last week's 6.91%; a year ago, rates averaged 6.66%.

"The continued strength of the economy has put upward pressure on mortgage rates, and along with high home prices, continues to impact housing affordability," said Sam Khater, Freddie Mac's chief economist. "The lack of entry-level supply also remains an issue, especially for those looking to become first-time homeowners."

Mortgage News Daily, which uses different criteria to determine averages, put the daily rate at 7.15% for Jan. 9, down slightly from the six-month high of 7.17% the day before.

Upcoming jobs data could push rates down

The latest labor market reports — including the unemployment rate and hourly wages — are scheduled to be released on Friday, Jan. 10. Depending on the data, those reports could cause some mortgage rate volatility in the coming days, said Realtor.com's Economic Research Analyst Hannah Jones.

"A strong, but not too strong, employment report could help settle some economic uncertainty going into the new year. Convincing evidence of cooling job growth and easing inflation will be important in bringing mortgage rates lower," Jones said.

The housing market softened more than seasonally typical in December, according to Realtor.com's monthly market trends report. The report found inventory at the end of December was up 22% compared to a year earlier, but still well below prepandemic levels. And many active listings have grown stale: Realtor.com found that homes spent an average of 70 days on the market last month, making it the slowest December in five years.

Applications slow down …

With mortgage rates continuing to tick up, applications have moved in the opposite direction. Adjusting for the New Year's holiday, the Mortgage Bankers Association reported that overall applications were down 3.7% compared to a week earlier.

The unadjusted purchase index was down 15% compared to the same week a year ago.

"Purchase applications declined for both conventional and government loans and dropped to the slowest weekly pace since February 2024," said Joel Kan, MBA's deputy chief economist. 

"Refinance applications increased despite higher rates, but the increase was compared to recent low levels and was driven entirely by an increase in VA refinances, which continue to show weekly swings."

… but activity remains brisk

Homebuyers remain interested, despite the rising rates. Home tour activity rose modestly to kick off 2025, according to Redfin's weekly report. It was up 2% for the week ending Jan. 5 compared to a month earlier and is also up 2% year-over-year.

Several factors could be behind the uptick in home tours, according to the report: More buyers have accepted higher rates as the new normal; others may be jumping back into the market now that the holidays are in the rearview mirror. The fact there are more homes listed for sale compared to recent years has also helped.

"Either way, I'm advising buyers to get serious now because desirable listings will get more competitive as the year goes on," said Emily Lam, a Redfin Premier agent in the Seattle area.

According to Redfin's report, months of supply continues to creep up nationally. For the week ending Jan. 5, Redfin pegged supply at 4.3 months, up from 4 months a year ago.