Freddie Mac Mortgage Rates—Dec. 12, 2024
What happened to mortgage rates this week
The Freddie Mac rate for a 30-year mortgage inched down 9 basis points, to 6.6%, as 10-year Treasury yields stayed around the 4.2% mark since last week’s release. The recent stabilization in Treasury yields comes as President-elect Donald Trump’s Cabinet and policy priorities fall into place. What’s more, the market is pricing in a probability of a December Fed rate cut at close to 95%, likely spurred by today’s consumer price index report that met analysts’ expectations. However, we may see rates continue to be volatile over the coming weeks as we approach the new year and inauguration.
What it means for the housing market
Looking ahead, mortgage rates are expected to keep mortgage payments essentially unchanged in 2025 despite continued home price growth, as noted in our 2025 forecast. However, higher economic growth under a Trump administration—which markets are currently anticipating—could lead to a boost in incomes. And if effective household tax rates go down, as promised by the Trump campaign, we could see a net increase in disposable household income even if incomes don’t rise. If both income growth and lower tax rates come to fruition, we could see homes become somewhat more affordable in 2025 than in the past few years. The wild card, of course, is how other policies of a new Trump administration affect the price of other goods and services.