close video What’s next for home buyers heading into the new year?

Zelman & Associates executive vice president Ivy Zelman discusses the hurdles of home affordability on ‘Barron’s Roundtable.’

Mortgage rates spiked this week to the highest level in five months, ending the year slightly higher than where they started.

Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage jumped to 6.85%, up from last week's reading of 6.72%. The average rate on a 30-year loan was 6.61% a year ago.

This week's increase marked the highest level on the 30-year loan since mid-July, when the rate was 6.89%, according to Freddie Mac data. The lowest rate this year was 6.08% at the end of September, while the highest — 7.22% — was reached at the beginning of May.

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A “For Sale” sign is seen on a house in Philadelphia on Aug. 16. (Joe Lamberti/Bloomberg via / Getty Images)

"Mortgage rates increased for the second straight week, rebounding after a decline from earlier this month," said Sam Khater, Freddie Mac’s chief economist. "While a slight improvement in new and existing home sales is encouraging, the market remains plagued by an overwhelming undersupply of homes. A strong economy can help build momentum heading into the new year and potentially boost purchase activity."

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The average rate on the 15-year fixed mortgage climbed to 5.92% from 5.84% last week. One year ago, the rate on the 15-year fixed note averaged 5.95%.