The average interest rate for a 30-year fixed mortgage in the United States fell this week to 6.15%, the lowest level observed in 2025 thus far, down marginally from 6.18% recorded last week, according to data released Wednesday by Freddie Mac. This marks the lowest average mortgage rate since October 3, 2024, when the rate briefly decreased to 6.12% before rising again. For context, the average rate was higher one year ago, standing at 6.91%.
Alongside the 30-year figures, rates on 15-year fixed-rate home loans—which are commonly selected by borrowers refinancing existing mortgages—also declined to 5.44% this week from 5.50% the previous week. This compares to the 6.13% average seen a year earlier, highlighting a downward trend in borrowing costs.
Mortgage rates are affected by multiple economic variables, including policy decisions by the Federal Reserve, investor expectations about economic growth and inflation, and the performance of bond markets. Typically, mortgage interest rates track movements in the 10-year U.S. Treasury yield, utilized by lenders as a pricing reference for home loans.
At midday Wednesday, the 10-year Treasury yield was measured at 4.14%, slightly lower than the 4.15% recorded last week. The mortgage rate for 30-year loans has generally been stable in recent weeks following a decline to 6.17% on October 30, which at that point was the lowest in more than a year.
Mortgage interest rates began to ease in July, anticipating several interest rate reductions by the Federal Reserve that commenced in September and continued into the current month. Although the Federal Reserve does not directly set mortgage interest rates, its decisions to lower short-term interest rates can signal expectations of reduced inflation or slower economic expansion. Such outlooks often prompt investors to increase purchases of U.S. government bonds, placing downward pressure on yields for long-term U.S. Treasury securities, which in turn may lead to lower mortgage rates.
However, these Federal Reserve rate cuts do not always result in proportional declines in mortgage rates. Buyers able to finance purchases or pay cash in the current market are somewhat better positioned than a year ago. Additionally, housing inventory has increased significantly compared to 2024, with many sellers reportedly lowering initial asking prices as properties remain on the market longer, according to Realtor.com data.
Nonetheless, overall affordability continues to challenge many prospective homeowners, especially first-time buyers who lack equity from selling a previous home to apply toward a new purchase. Economic and labor market uncertainties further contribute to subdued buyer participation. Although sales of existing U.S. homes increased in November from October, they slowed compared to the previous year for the first time since May, despite mortgage rates holding near their yearly low. Sales through the first eleven months of this year reflect a 0.5% decrease relative to the same timeframe in the prior year.
Economic forecasters generally predict that 30-year mortgage rates will remain modestly above 6% throughout the next year.