Mortgage rates rise for second week

Mortgage rates in the U.S. climbed for the second week in a row, squeezing homebuyers as borrowing costs hit the highest level since early July.

The average for a 30-year fixed loan was 6.85%, up from 6.72% last week, Freddie Mac said in a statement.

Mortgage rates have been hovering near 7% in recent weeks. Despite the financial pressures, some buyers are forging ahead. Contracts to buy homes were up 4.1% from a year earlier, according to Redfin Corp. data for the four weeks through Dec. 15.

The new-home market is also holding up. Sales of those properties climbed in November, while inventory rose to the highest since the end of 2007, according to government data.

Last week, the Federal Reserve lowered its benchmark interest rate for a third time. Economists are expecting more cuts in 2025 given signs that some price pressures are easing. The central bank’s preferred measure of underlying inflation rose 0.1% in November from a month earlier, the slowest monthly gain since May.

Continuing jobless claims most in 3 years

Recurring applications for U.S. unemployment benefits rose to the highest in more than three years, adding to signs that it is taking longer for out-of-work people to find a job.

Continuing applications, a proxy for the number of people receiving benefits, rose to 1.91 million in the week ended Dec. 14, according to Labor Department data released Thursday. Initial claims, meanwhile, ticked down to 219,000 in the week ended Dec. 21.

Recurring filings have been gradually trending up this year, consistent with other data showing the unemployed are having a harder time finding work.

Federal Reserve Chair Jerome Powell said last week that the labor market remains “in solid shape,” though policymakers are keeping a close eye for any sign of deterioration. The labor market is cooling, but not in a way that would raise concerns, Powell said at a press briefing following policymakers’ decision to cut interest rates for the third time in three months.

The four-week moving average of new applications, a metric that helps smooth out volatility, rose to 226,500.

Musk’s xAI raises $6b in new funding

The artificial intelligence company founded by Elon Musk, xAI, said Monday that it had raised $6 billion, giving the startup a major lift as it competes with rivals, including OpenAI.

The company said on its website that it would use the money to continue building its infrastructure and accelerate research and development. BlackRock, Fidelity, Sequoia Capital and others participated in the funding round.

The fundraising could value xAI at $35 billion to $40 billion, up from $24 billion earlier this year, The New York Times previously reported.

Musk and xAI did not immediately respond to requests for comment.

Musk is trying to play catch-up on AI. The billionaire, who also leads other companies, including Tesla, X and SpaceX, publicly debuted xAI last year, well after a boom in the AI industry spawned dozens of products that could create text, images and even videos.

Musk quickly built what he said would be the world’s largest supercomputer in Memphis, which powers Grok, xAI’s chatbot. Grok is available to subscribers on X.

Compiled from Bloomberg reports.