WASHINGTON – Mortgage rates in the United States have seen a recent uptick, with the average rate for a 30-year fixed-rate mortgage reaching 6.95%. This marks an increase from the 6.62% reported on January 4th, according to data from Freddie Mac. The rise in mortgage rates comes despite the Federal Reserve’s decision in December to maintain interest rates between 5.25% and 5.5%. The central bank also hinted at possible future cuts, which some analysts believe could lead to forecasted lower mortgage rates.

The housing market continues to grapple with high housing costs and a scarcity of inventory, factors that are likely to persist even if the Federal Reserve reduces rates. Despite these challenges, projections suggest that the rate of new home construction, or home starts, is expected to remain steady. This could provide a measure of stability in the market, even as potential homebuyers face higher borrowing costs.

The Federal Reserve’s hints at future rate cuts are based on their ongoing assessments of economic conditions. If such reductions occur, they could help ease mortgage rates from their current levels. However, the timing and impact of any such policy changes remain uncertain.

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