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July 2025 Mortgage Rate Update
As of July 2025, 30‑year fixed mortgage rates are trending around 6.7% to 6.8%, having edged down slightly from early‑year peaks near 7% 15‑year fixed rates are hovering around 6.2% to 6.3% . While rates remain well above the pandemic-era lows, the timing of anticipated Federal Reserve rate cuts is fueling cautious optimism.
Key Influences
- Federal Reserve policy stance: The Fed held the federal funds rate steady at 4.25–4.50% in June 2025, citing persistent inflation near 2% and wanting to gauge economic momentum. Their cautious tone suggests two rate cuts by end‑2025—potentially easing mortgage costs.
- Resilient inflation and labor market: While inflation has eased from 2021–2023 highs, year‑over‑year CPI remains around 2.7–2.8%. Employment remains steady, but unemployment risks rising could shift Fed dynamics.
- Treasury yields & market sentiment: Mortgage rates are closely tied to the 10‑year Treasury. Fluctuations in geopolitical events, oil prices, and credit demand are adding volatility—but the treasury yield is trending modestly lower, keeping mortgage rates range-bound .
Expert Forecasts for the Rest of 2025
Mid‑Year to Year‑End Projections
| Source | 30‑Year Forecast (Jul 2025) | Year‑End Forecast |
| Fannie Mae | ~6.8% | ~6.6% |
| Mortgage Bankers Association | Decline from ~6.9% to ~6.5% | ~6.5% |
| National Assoc of Home Builders | avg ~6.7% through 2025 | — |
| Realtor.com | ~6.3% | ~6.2% |
| Norada Real Estate | 6–6.5%; Gradual easing | ~6.0%+ |
Experts generally forecast a gradual decline toward 6.0–6.5% by year‑end—buoyed by softening inflation and Fed cuts, but tempered by global uncertainties.
What This Means for Homeowners and Buyers
- Locking Strategy
- Planning to buy? Consider rate locks now, especially with rates forecasted to slowly decline. A mid‑year lock at ~6.7% may save costs compared to uncertain future spreads.
- Refinancing? Stronger motivation exists to refinance adjustable‑rate mortgages (ARMs) or shorter‑term loans if forecasts hold.
- Planning to buy? Consider rate locks now, especially with rates forecasted to slowly decline. A mid‑year lock at ~6.7% may save costs compared to uncertain future spreads.
- “Lock‑in” effect
- Existing homeowners with pre‑pandemic low rates are hesitant to trade up, worsening inventory shortages.
- Existing homeowners with pre‑pandemic low rates are hesitant to trade up, worsening inventory shortages.
- Builder incentives
- With housing demand softening and mortgage rates elevated, homebuilders are offering price cuts and rate buy‑downs to appeal to buyers.
- With housing demand softening and mortgage rates elevated, homebuilders are offering price cuts and rate buy‑downs to appeal to buyers.
How to Navigate Rates in July 2025
- Shop multiple lenders to compare rate offers—spread differences can be substantial.
- Consider adjustable or hybrid ARMs for short‑term savings if you’re comfortable with future resets.
- Watch Fed meetings (next expected cut by Aug–Sept) and Treasury yields for rate direction.
- Stay informed—subscribe for updates or consult our Mortgage Rate Page for daily trends.
FAQs
Will mortgage rates drop below 6% in 2025?
Most forecasts expect rates to ease into the 6.0–6.5% range by late 2025. Some optimistic projections, like Fannie Mae’s, target ~6.0% year‑end.
When is the Fed likely to cut rates?
With pauses in June and May, the Fed has signaled potential cuts in late summer to early fall, contingent on inflation trends.
Should I refinance now or wait?
If your current rate is significantly higher than 6.5–7%, refinancing during predicted downward trends could yield savings. Consult with your lender.
Read Next
- Top-Rated Online Mortgage Lenders: What to Look For
- Should You Stay or Should You Go? Navigating Your Mortgage Refinance with the Same Lender vs. a New Lender
Get Expert Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
