Mortgage Rates Decline 9 Basis Points in a Week

On July 2, 2025, the average interest rate for a 30-year, fixed-rate conforming mortgage loan in the U.S. stood at 6.668%, marking a slight decrease of 1 basis point from the previous day and a decline of approximately 9 basis points from a week prior. This trend reflects a broader pattern of modest fluctuations in mortgage rates, which have been hovering near the 7% mark for several months.

For instance, the 30-year jumbo mortgage rate currently stands at 6.779%, down from 6.991% a week ago and 7.023% a month ago. Similarly, the 30-year FHA mortgage rate is at 6.467%, a decrease from 6.519% a week ago and 6.530% a month ago. The 30-year VA mortgage rate is 6.288%, down from 6.383% a week ago and 6.445% a month ago. The 30-year USDA mortgage rate is 6.455%, a slight decrease from 6.497% a week ago and 6.506% a month ago. The 15-year conventional mortgage rate is 5.866%, down from 5.954% a week ago and 6.072% a month ago.

The recent decline in mortgage rates comes after a period of relative stability, with rates lingering near 7% since the Federal Reserve initiated cuts to the federal funds rate last September. Despite initial hopes that these cuts would lead to a decrease in mortgage rates, the rates quickly rebounded and have since remained elevated. This trend has been particularly notable since January 2025, when the average rate on a 30-year, fixed-rate mortgage surpassed 7% for the first time since May 2024.

Experts agree that mortgage rates in the 2% to 3% range are unlikely to return in the near future, barring another widespread economic disaster. However, rates around the 6% point are considered achievable if the U.S. can effectively manage inflation and lenders feel confident about economic prospects. This optimism is supported by the modest decline in rates observed at the end of February, which brought them closer to the 6.5% mark, and a brief dip below 6.5% in early April.

Despite the recent declines, uncertainty surrounding economic policies and potential labor market contractions has led some observers to express concern about a resurgence in inflation. This backdrop has made high mortgage rates a significant challenge for U.S. homebuyers, although some are finding ways to make their purchases more economical, such as negotiating rate buydowns with builders when acquiring newly constructed property.

To secure the best possible mortgage rate, homebuyers should focus on maintaining a strong financial profile. This includes ensuring excellent credit, with a score of 740 or higher considered top tier for conventional mortgages. Additionally, maintaining a low debt-to-income (DTI) ratio is crucial, with a DTI of 36% or below typically preferred by lenders. Getting prequalified with multiple lenders, including large banks, local credit unions, and online lenders, can also help homebuyers compare offers and find the best fit for their needs.

Several factors influence mortgage interest rates, with the state of the U.S. economy being the most significant. Lenders may raise rates in anticipation of inflation to protect their profitability. The national debt also exerts upward pressure on interest rates, as the government's borrowing needs increase demand for loans. The demand for home loans is another key factor, with lenders adjusting rates based on the volume of mortgage applications. The Federal Reserve's decisions, particularly changes to the federal funds rate and management of its balance sheet, also play a crucial role in shaping mortgage rates.

Comparing rates on different types of loans and shopping around with various lenders are essential steps in obtaining the best mortgage. For homebuyers with excellent credit, a conventional mortgage may be the best option. However, those with lower credit scores may find that an FHA loan provides more favorable terms. Exploring options with different banks, credit unions, and online lenders can result in significant savings, with Freddie Mac research indicating that homebuyers may save $600 to $1,200 annually by applying with multiple mortgage lenders.