(NewsNation) — Mortgage rates are back above 7%, and that’s slowing an already sluggish housing market with potential buyers choosing to wait on the sidelines to start the year.

Home sales have stalled in January, down 10% in the most recent week compared to a year ago, according to a new analysis by Mike Simonsen, founder of Altos Research, a real estate analytics firm.

“This housing market is on hold until mortgage rates come down,” Simonsen wrote. “When will that be? I have no idea.”

The average rate on the standard 30-year fixed mortgage rose to 7.04% last week, the highest level since May 2024, according to Freddie Mac data.

Simonsen pointed to several metrics that confirm a housing slowdown to start the year: Single-family inventory is up 25% from a year ago, and there were almost 4% more unsold new listings than the year prior.

“Inventory growth is from demand weakness rather than supply growth,” Simonsen wrote on X.

There is a bit of good news for buyers when it comes to prices. About one-third of homes have taken a price reduction from the original list price, and newly pending sales are coming in just 0.5% higher than a year ago, Simonsen said.

“This time of year, you’d expect prices to push higher with the spring inventory. Doesn’t seem to be happening now,” he wrote.

Where are mortgage rates headed this year?

Mortgage rates are determined by several factors like inflation, bond yields, the strength of the economy and policy decisions by the Federal Reserve.

Nobody knows how those variables will change in 2025, but experts broadly agree: Don’t expect pandemic-era 3% mortgage rates anytime soon.

Forecasters generally expect mortgage rates to hover in the 6% range this year.

Bankrate: Expects rates to land at 6.5% by the end of the year.

• “The average 30-year fixed mortgage rate will spend most of the year in the 6s, with a short-lived spike above 7 percent, but never getting below 6 percent,” Greg McBride, CFA, chief financial analyst for Bankrate, said in a statement.

Realtor.com: Projects mortgage rates will average 6.3% through 2025 and end the year around 6.2%

• “Generally, we expect mortgage rates to ease and home prices to tick higher in the coming year, resulting in very little, if any, change in the cost to purchase a home,” Realtor.com senior economic research analyst Hannah Jones said in a report.

The National Association of Realtors (NAR): Forecasts mortgage rates to stabilize near 6% in 2025, likely establishing a “new normal”

The Mortgage Bankers Association: Expects rates to hover between 6.4% and 6.6%, holding steady at 6.3% into 2026

Fannie Mae: Predicts average mortgage rates will decline modestly but remain above 6% throughout the year.

• “From an affordability perspective, we think 2025 will look a lot like 2024, with mortgage rates above 6 percent, home price growth easing from recent highs but staying positive, and supply remaining below pre-pandemic levels,” Mark Palim, Fannie Mae senior vice president and chief economist, said in a release last month.