Despite three interest rate cuts from the Federal Reserve in 2024, mortgage rates hit the highest level since July 2024 at the turn of the year, according to the latest report from the Northwest Multiple Listing Service (NWMLS).

“The 30-year mortgage interest rate was actually higher at the end of 2024 (6.85%) than at the end of 2023 (6.61%),” wrote Steven Bourassa, director of the Washington Center for Real Estate Research at the University of Washington. “We may well be experiencing the pains of adjusting to a new normal, with persistent interest rates of 6% or higher.”

And rates are continuing to creep higher, still: As of Jan. 2, the mortgage rate was 6.91%.

Further strain was put on buyers at the end of 2024 as the median home price rose 4.3% year over year in December, hitting $623,500. Even higher median prices were seen around the Seattle area, with the most elevated medians seen in San Juan ($849,000), King ($800,000) and Snohomish ($744,995) counties.

Despite these affordability hurdles, the market in the Northwest MLS region showed some positive activity last month, with active listings and sales transactions up 25% and 19.8% year over year, respectively. NWMLS says buyers could be adjusting to elevated costs, accepting what very well could be the new normal.