Today's Mortgage Rates - 07/04/2025

Mortgage Rates Post Fifth Decline

Fixed-rate mortgage declined again this week, and somewhat more appreciably.

Freddie Mac reported today that the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) declined by another ten basis points (0.10%) to 6.67%. The larger-than-expected decline put the rate on the most popular mortgage type and term at its lowest point since early April.

Average offered rates for 15-year fixed-rate mortgages fell by just a little less, posting a nine basis point decrease. This left the average rate for the most common shorter-term mortgage at 5.80%, about a four-month low.

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 seventeen basis points, sliding to 5.99%./p>

With the decrease, the gap in rate compared to a 30-year FRM widened to sixty-eight basis points (0.68%), offering homebuyers a chance at interest savings of over $10,200 over the next five years with a $300,000 loan amount. To learn more about ARMs, you should read HSH's Comprehensive Guide to Adjustable Rate Mortgages.

Mortgage rates have been drifting lower for some weeks as financial markets appear to have relaxed a bit. The expected inflation hit from tariffs hasn't yet shown itself in a meaningful way, and the economy continues to burble along at what appears to be a modest pace. Of late, rates had been pushed lower by concerns that a more pronounced slowing in the job market was in the offing, but the latest data suggest that things are still in fair shape.

The JOLTS survey for May featured more job openings and fewer layoffs, although hiring cooled a bit. The May-into-June rise in new weekly filings for unemployment assistance has now taken a third step down from its recent peak, and June's jobs report showed somewhat more hiring than was expected along with a slight decline in the unemployment rate.

WIth the labor market still performing fairly, the Fed will continue to feel justified waiting for more clues as to the effects of tariffs on inflation. It may be a bit of time yet before that will be seen. In the meanwhile, the reassuring data on labor market conditions buoyed stocks, but lifted bond yields a little. As such, some of this week's decline in mortgage rates will be erased in the coming days, but only some.

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.