Average rate on a 30-year mortgage climbs to 6.85%, highest since July

ABC News - Dec 26th, 2024

The average rate on a 30-year mortgage in the U.S. has climbed to 6.85%, marking its highest point since mid-July. This increase comes amid a rise in bond yields, which lenders use as a benchmark for setting home loan prices. Freddie Mac reported the rate hike from 6.72% last week, with the average rate on a 15-year fixed mortgage also rising. The uptick in rates continues to challenge homeownership affordability, as high borrowing costs and escalating home prices deter many potential buyers. Despite a slight recovery in home sales in November, the housing market remains in a downturn and is projected to have its worst year since 1995.

The increase in bond yields follows signals from the Federal Reserve indicating fewer rate cuts next year than previously anticipated. While the Fed does not directly set mortgage rates, its monetary policy actions influence inflation and the 10-year Treasury yield, which in turn affects mortgage rates. Looking ahead, a key uncertainty is the potential impact of President-elect Donald Trump's policy initiatives on inflation and the national debt, which could further elevate mortgage rates. With the 10-year Treasury yield recently at 4.61%, analysts are closely watching economic trends that could shape the mortgage landscape in the coming year.

Donald Trump Federal Reserve Housing Market Homeownership Mortgage Rates 30 Year Mortgage Freddie Mac Bond Yields

Story submitted by Fairstory

RATING

7.0

Fair Story

Consider it well-founded

The article provides a comprehensive overview of the trends in U.S. mortgage rates, presenting a factual account of recent changes and contextualizing them within broader economic movements. It offers a focused examination of the factors influencing these rates, though it could benefit from more diverse perspectives and explicit sourcing. While the article achieves clarity in its language and structure, enhancing its transparency and balance could improve its overall quality.

Accuracy

The article is factually accurate, providing specific data points about mortgage rates over time, such as the recent increase to 6.85% and historical comparisons. It quotes credible figures from Freddie Mac, a recognized authority in the housing market, ensuring the verifiability of the data presented. However, the article could improve by explicitly citing sources for economic forecasts mentioned, such as those predicting mortgage rates to remain above 6% next year. Overall, the factual content aligns well with known data, but additional source attribution would strengthen its accuracy.

Balance

The article predominantly focuses on the economic aspect of mortgage rates, with limited perspectives from diverse stakeholders, such as potential homebuyers or real estate professionals. The mention of President-elect Donald Trump's policy initiatives as a potential wildcard adds some political context, but it lacks a thorough analysis of opposing viewpoints or expert opinions on how these policies could affect the housing market. By incorporating a broader range of perspectives, the article could present a more balanced view of the implications of changing mortgage rates.

Clarity

The article is well-structured and written in clear, straightforward language, making it accessible to a general audience. It logically progresses from current mortgage rate data to broader economic trends, providing context for the reader. The tone remains professional throughout, with no evident emotive language that might detract from its objectivity. However, some segments could benefit from further simplification to aid comprehension, particularly for readers unfamiliar with economic terminology. Overall, the clarity is commendable, though minor adjustments could improve reader engagement.

Source quality

The article references Freddie Mac, a reputable source in the housing sector, lending credibility to the mortgage rate data. However, the article does not cite additional authoritative sources for other statements, such as economic forecasts or the impact of Federal Reserve policies. The inclusion of expert opinions or insights from economists could enhance the article's credibility. The reliance on a single primary source limits the depth of analysis, suggesting a need for more diverse and authoritative sourcing to support its claims.

Transparency

The article provides a clear explanation of the relationship between mortgage rates and bond yields, but it lacks transparency in attributing specific forecasts and opinions to identifiable sources. There is no disclosure of potential conflicts of interest or affiliations that could sway the narrative. While it mentions the Federal Reserve and potential policy impacts, it does not delve into the methodology behind economic predictions or provide sufficient background on how these factors interplay. Greater transparency about the basis of its claims would enhance the article's credibility.