Today's Mortgage Rates - 07/02/2025

Slight Slide For Mortgage Rates

Fixed-rate mortgage rates drifted lower again this week, retreating to early-May levels.

As reported by Freddie Mac today, the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) declined by another four basis points (0.04%) to 6.77%.. This rate has moved very little since mid-April, and is modestly below year-ago levels.

Average offered rates for 15-year fixed-rate mortgages fell by a bit more, managing a seven basis point decrease. This left the average rate for the most popular shorter-term mortgage at 5.89%, a seven-week low.

At present, a 5/1 ARM might offer a homebuyer a lower-cost alternative to a long-term fixed-rate mortgage, but the difference in rate between 30-year FRMs and 5-year hybrid ARMs narrowed a little this week. The Mortgage Bankers Association said that the initial fixed interest rate on a hybrid 5-year ARM increased by six basis points, rising to 6.16%. the middle of a range that has been in place since the week of May 16.

With the increase, the gap in rate compared to a 30-year FRM was pared to sixty-one basis points (0.61%), offering homebuyers a chance at some interest savings of about $9,200 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.

Financial markets have been holding up well since the U.S. military incursion into Iran. A brokered cease-fire between Israel and Iran seems to be holding, equity prices have been generally rising and bond yields falling. Amidst this, Fed Chair Powell gave his semi-annual monetary policy report before Congress, reiterating the Fed's unwillingness to lower policy rates until the impact of still-unknown tariff levels are better understood.

It is not clear when increases in costs will begin to be seen, but we will get an updated look at PCE price inflation for May on Friday. Fed Chair Powell noted that estimates based on CPI and other observations peg overall PCE at a 2.3% rate and core PCE prices at a 2.6% annual clip. Should those early estimations prove true, this would be a 0.2% and 0.1% increase in PCE measures, respectively. That's probably not enough to disturb the very flat trend for interest rates in general and for mortgage rates in specific.

That said, the calendar turns again on Tuesday, bringing with it additional consequential information regarding the labor market. Until then, and at least for the next couple of days, mortgage rates aren't likely to move very much at all.

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.