Today's Mortgage Rates - 07/25/2025

Mortgage Rates Edge Down

Bobbing and weaving of late, mortgage rates eased a little this week.

As reported by Freddie Mac today, the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) declined by a single basis point (0.01%) to 6.74%. It has essentially been unchanged for the last three weeks.

Average offered rates for 15-year fixed-rate mortgages managed a slightly larger fall, posting a slide of five basis points. This put the average rate for the most common shorter-term mortgage at 5.87%, erasing a recent upward blip.

At present, a 5/1 ARM might offer a homebuyer a lower-cost alternative to a long-term fixed-rate mortgage, and the difference in rate between 30-year FRMs and 5-year hybrid ARMs expanded a little this week. The Mortgage Bankers Association said that the initial fixed interest rate on a hybrid 5-year ARM decreased by seven basis points, erasing a like-sized rise the previous week and returning to 6.01%.

With the decrease, the gap in rate compared to a 30-year FRM is now sixty-six basis points (0.66%). Comparing this average rate against that one for a 30-year FRM, a homebuyer with a $300,000 loan amount who selects the 5-year ARM would be able to save nearly $11,000 in interest cost over the first five years of the loan, while also reducing the loan's outstanding balance by nearly $2,400 compared to the 30-year FRM.

ARMs aren't for everybody, though. To help decide whether one might work for you, read HSH's Comprehensive Guide to Adjustable Rate Mortgages.

High mortgage rates continue to damp the housing market, and home sales in June were pretty soggy. Existing home sales declined by 2.7% compared to May, and the 3.93 million annualized pace of sales is the slowest since last September. Slack sales and growing numbers of homes for sale still haven't fostered lower prices; in fact, the median price of an existing home sold last month just hit a new all-time high of $435,300 according to the National Association of Realtors. Combined with high mortgage rates, home affordability continues to be the number one problem facing the housing market.

Sales of new homes last month were also soft, but did manage a modest 0.6% improvement after May's 11.6% plummet. There is plenty of inventory available to buy in the new home market with 9.8 months of supply available at the present rate of sale. Assisted by builder discounts, the median cost of a new home sold in June was 2.7% lower than in May, and at $401,800 represents a relative bargain compared to the existing home market.

Overcoming high housing costs requires significantly lower mortgage rates, but they aren't in the offing. The yields which most influence fixed mortgage rates declined through late Tuesday, but have firmed again, and that suggests we'll see level to perhaps slightly higher mortgage rates in the next few days.

Each week in HSH's MarketTrends newsletter, we track and discuss economic conditions that affect mortgage rates and their impact on housing markets and consumers. Read the most recent edition of MarketTrends or subscribe for email delivery.