Record-low 30-year fixed mortgage rate achieved this week
Mortgage Rates Moderate Slightly in Late 2025, Offering Slight Relief to Home Buyers
As we move into the second half of 2025, mortgage rates are expected to experience a gentle decline, offering a glimmer of hope for home buyers who have been grappling with affordability issues.
Currently, the 15-Year Fixed mortgage rate stands at 5.71%, while the 30-Year Fixed mortgage rate hovers around 6.58%. These rates, although lower than earlier levels near 7% earlier this year, remain high compared to the very low rates seen in previous years.
According to key forecasts from reputable sources, the 30-Year Fixed mortgage rate is predicted to stay mostly in the mid-6% range for the remainder of 2025, with a general gradual decrease toward about 6.3%-6.5% by December.
Mortgage Bankers Association predicts rates of 6.8% for Q3 and 6.7% for Q4, while Fannie Mae anticipates a decrease to 6.7% for Q3 and 6.4% by the end of 2025. Wells Fargo, National Association of Realtors, and National Association of Home Builders all predict rates to be around 6.7% for Q3. The overall average prediction suggests a slight decline toward 6.3%-6.5% by December.
This moderation in rates could stimulate more home purchases, although rates remain elevated compared to previous years. Home price growth is expected to moderate, with fewer drastic increases, as persistent but slightly easing rates help balance supply and demand. More sellers and developers could re-enter the market, reducing the scarcity caused by rate lock and cautious behavior earlier in the year.
However, affordability pressures remain a key challenge, as elevated mortgage rates will still limit buying power for many prospective homeowners. The Federal Reserve’s decisions and inflation trends remain crucial drivers affecting mortgage rates and thus the housing market prospects in the coming months.
Meanwhile, applications for adjustable-rate mortgages (ARMs) have soared by 25%, and refinance applications now account for almost 47% of all mortgage applications. The drop in the 30-year fixed rate mortgage, which reached an average of 6.58% this week, offers a potential boost to home buyers struggling with affordability. Refinancing applications have surged by 10.9% last week.
In the current housing market, it is important to approach the news with a healthy dose of realism and explore different mortgage products such as fixed-rate mortgages, ARMs, and government-backed loans to determine which best aligns with your financial situation and risk tolerance.
For those seeking a stable cash flow and protection from borrowing cost volatility, Norada delivers turnkey rental properties in resilient markets. Economists predict that the average 30-year mortgage rate will likely remain above 6% for the remainder of the year.
References:
[1] Mortgage Rates Today
[2] Freddie Mac Primary Mortgage Market Survey
[3] Bankrate.com
[4] CNBC
[5] Realtor.com
- The predicted decline in mortgage rates offers a potential relieve for home buyers struggling with affordability.
- Although mortgage rates are expected to stay relatively high, the slight moderation could stimulate more home purchases.
- Home price growth is expected to moderate due to the balance between supply and demand caused by the easing rates.
- The drop in the 30-year fixed rate mortgage has led to a surge in refinance applications, providing some relief to home buyers.
- In the current housing market, it's essential to consider various mortgage products like fixed-rate mortgages, adjustable-rate mortgages, and government-backed loans.
- For those seeking a stable cash flow and protection from borrowing cost volatility, Norada offers turnkey rental properties in resilient markets, even with the average 30-year mortgage rate expected to remain above 6% for the remainder of the year.
