Mortgage Rates Hold Steady Near 7%

Updated: 30 May 25

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Mortgage rates remained stable this week, with the average 30-year fixed-rate mortgage increasing slightly to 6.89%, according to Freddie Mac. Meanwhile, the 15-year fixed-rate mortgage rose to 6.03%. Elevated rates continue to challenge homebuyers, though mortgage applications for purchases rose by 3%. Experts advise buyers to shop for the best rates to save on costs. The 10-year Treasury yield, a key influencer of mortgage rates, also saw slight fluctuations, reflecting economic uncertainty and policy implications.

Current Mortgage Rate Trends

The average 30-year fixed mortgage rate increased to 6.89% this week, a slight rise from 6.86% the previous week, according to Freddie Mac data. Meanwhile, the 15-year fixed-rate mortgage, a popular choice for refinancing, also ticked up, reaching 6.03% from 6.01% last week. These rates, while slightly below their year-ago levels, remain high compared to historic lows observed during the pandemic, contributing to elevated borrowing costs for homebuyers.

Market Influences on Rates

Mortgage rates closely follow the 10-year Treasury yield, which has been volatile due to mixed economic signals. Currently, the 10-year Treasury yield sits at 4.43%, slightly down from 4.47% earlier in the week. Broader economic factors such as inflationary pressures, Federal Reserve interest rate policies, and fiscal uncertainties like recent tax proposals and credit rating concerns also play a significant role in shaping rate trends. This complex backdrop has kept mortgage rates elevated, with little sign of significant relief in the near term.

Impact on Homebuyers and Market Activity

Higher mortgage rates continue to challenge affordability for prospective homebuyers. Elevated borrowing costs have reduced purchasing power, especially as home prices remain high amid constrained inventory. Despite these challenges, mortgage applications for home purchases rose 3% over the past week, reflecting resilient buyer demand. However, refinancing activity dropped by 7%, as current rates offer limited opportunities for cost-saving refinance options. The housing market remains in a delicate balance, with high rates dampening overall activity while still attracting determined buyers.

Expert Advice for Aspiring Homebuyers

Experts emphasize the importance of shopping around for the best mortgage rates to potentially save thousands over the life of a loan. Buyers should obtain multiple quotes from lenders and consider locking in rates when favorable. In a high-rate environment, strategies such as making larger down payments, opting for adjustable-rate mortgages, or negotiating for lower closing costs can help offset the financial burden. Additionally, buyers should focus on affordability and prioritize properties within their budget to maintain long-term financial stability.