A sharp rise in mortgage rates at the end of December slowed mortgage demand during the housing market’s typically quiet season.
U.S. mortgage rates reached their highest level since July, with the 30-year fixed-rate mortgage climbing to 6.91%, up from 6.85% the previous week and 6.62% a year ago, according to Freddie Mac.
Refinance applications, which are sensitive to rate changes, fell 36% compared to the previous month but remained 10% higher than a year ago.
Purchase applications declined 13% during the same period and were 17% lower year-over-year, highlighting persistent weakness in the market despite increased housing inventory. Elevated prices and higher borrowing costs have left many properties unsold.