US mortgage rates rise to highest since early July, suppressing demand

REAL ESTATE

US mortgage rates climbed closer to 7 percent, threatening to squeeze buyers trying to crack into the housing market. The average on a 30-year mortgage rose to 6.91 percent as of Jan. 2, up from 6.85 percent a week earlier, according to Freddie Mac data released Thursday. A measure from the Mortgage Bankers Association advanced 8 basis points to 6.97 percent in the period ended Dec. 27, a nearly six-month high. High borrowing costs are weighing on affordability. They’ve also pressured demand recently, with the MBA’s index of home-purchase applications sliding nearly 7 percent to the lowest level since mid-November. While the figures are adjusted for seasonal effects, they are still prone to wide swings around the year-end holidays. “It’s not exactly a good way to start the new year,” said Odeta Kushi, deputy chief economist at First American Financial Corp. “Industry experts are coming to the consensus that 2025 is another year of higher for longer for the housing market. It’s not great news.” Mortgage rates tend to track Treasury yields, which continued to climb in late December after Federal Reserve policymakers projected a slower pace of interest-rate cuts in 2025 amid sticky inflation. “Compared to this time last year, rates are elevated and the market’s affordability headwinds persist,” Sam Khater, Freddie Mac’s chief economist, said Thursday in a statement. — BLOOMBERG NEWS

TECHNOLOGY

Apple has agreed to pay $95 million to settle a lawsuit accusing the privacy-minded company of deploying its virtual assistant Siri to eavesdrop on people using its iPhone and other trendy devices. The proposed settlement filed Tuesday in an Oakland, Calif., federal court would resolve a 5-year-old lawsuit revolving around allegations that Apple surreptitiously activated Siri to record conversations through iPhones and other devices equipped with the virtual assistant for more than a decade. The alleged recordings occurred even when people didn’t seek to activate the virtual assistant with the trigger words, “Hey, Siri.” Some of the recorded conversations were then shared with advertisers in an attempt to sell their products to consumers more likely to be interested in the goods and services, the lawsuit asserted. Apple isn’t acknowledging any wrongdoing in the settlement, which still must be approved by US District Judge Jeffrey White. If the settlement is approved, tens of millions of consumers who owned iPhones and other Apple devices from Sept. 17, 2014, through the end of last year could file claims. Each consumer could receive up to $20 per Siri-equipped device covered by the settlement, although the payment could be reduced or increased, depending on the volume of claims. — ASSOCIATED PRESS

LABOR

Leaders from a US dockworkers’ union and the group that represents their employers are set to resume contract talks on Jan. 7 as the threat of a strike looms, according to a person familiar with the negotiations. Facing a mid-January deadline to reach a deal, Tuesday’s planned talks are a welcome sign for importers and exporters bracing for a labor disruption that would shut every major port on the US East and Gulf coasts. Those gateways account for roughly half of all the country’s container volumes, according to data compiled by the American Association of Port Authorities. But the issue of whether employers will be allowed to add semi-automated machines to port terminals under the next labor contract may once again prove difficult to resolve. In early October, the International Longshoremen’s Association reached a tentative deal with ocean carriers and terminal operators on a 62 percent wage increase over six years, suspending a three-day strike but leaving the technology issue unresolved. — BLOOMBERG NEWS

FINANCE

Morgan Stanley terminated its membership of a major climate-banking group, joining a wave of Wall Street firms that recently quit a global alliance intended to aid the reduction of greenhouse-gas emissions. Morgan Stanley is leaving the Net-Zero Banking Alliance, the lender said on Thursday. Citigroup Inc. and Bank of America Corp. said earlier this week that they were doing the same. The defections are playing out against a tense political backdrop in the United States, as the country’s biggest financial firms find themselves the targets of Republican campaigns that have characterized net zero groups as climate cartels. Such attacks have picked up, and as recently as November, Texas led a move to sue BlackRock Inc., Vanguard Group Inc., and State Street Corp. for allegedly breaching antitrust laws by using climate-friendly investment strategies to suppress the supply of coal. BlackRock said the suggestion that it invests in companies with the goal of harming them is baseless. Other banks that have recently quit NZBA include Goldman Sachs Group Inc. and Wells Fargo & Co. All said they remain committed to their own net zero emissions goals and to helping clients reduce their carbon footprints. “We will continue to report on our progress as we work towards our 2030 interim financed-emissions targets,” Morgan Stanley said by email. — BLOOMBERG NEWS

GOLD

Rolex SA, the biggest luxury Swiss watch brand, raised prices on some of its most popular models after gold values surged in 2024. The Geneva-based company, controlled by a Swiss foundation named for its cofounder Hans Wilsdorf, began the year by hiking prices as much as 8 percent on some models made from precious metals. A yellow gold Day-Date with a 40-millimeter black dial costs $45,809 as of Jan. 1, up from $42,093, according to Rolex’s website in France. A yellow gold GMT-Master II costs $45,790, up from $42,404. Rolex typically raises prices once a year on Jan. 1. Price increases can be indicative of the demand for premium luxury products, the cost of materials and labor as well as inflation. Gold recorded its biggest annual price increase in 14 years in 2024, soaring 27 percent. A Rolex spokesperson in Geneva declined to comment on the price changes. This year’s increases are larger than last year’s. Rolex raised prices on some precious metal models by about 4 percent in the UK at the start of 2024. — WASHINGTON POST

CURRENCY

The euro fell to its weakest level versus the dollar in over two years and the pound slid to an eight-month low amid ongoing concerns about Europe’s economy. The common currency fell as much as 0.5 percent to $1.0306, the lowest since November 2022, extending its decline since late September to around 8 percent. The pound dropped 1 percent to $1.2389, the weakest level since May. The euro has been dragged lower by fears that the bloc’s export-orientated economies will be hit by US trade tariffs and expectations the European Central Bank will cut interest rates more aggressively than the Federal Reserve. Political instability in the bloc’s biggest economies has also added to the pressure. For the pound, the main headwind has been weak UK growth, which has reinforced the case for deeper interest-rate cuts. Britain’s GDP was flat in the third quarter of 2024 and the Bank of England expects the fourth quarter to show no growth as well. “Weak growth is a common issue for Germany, France and the UK with the latter suffering from a step up of recession fears on the back of the soft UK GDP releases at the end of 2024,” said Jane Foley, head of FX strategy at Rabobank. She sees the euro moving to parity versus the dollar in the second quarter. — BLOOMBERG NEWS