Mortgage Rates Hold Steady Amid Economic Uncertainty

On June 24, 2025, the average interest rate for a 30-year, fixed-rate conforming mortgage loan in the U.S. stood at 6.797%, marking a slight decrease of approximately 1 basis point from the previous day and 2 basis points from a week prior. This stability in mortgage rates reflects a broader trend of minimal fluctuation in the market.

For 30-year jumbo mortgages, the current rate is 6.874%, down from 6.962% a week ago and 7.048% a month ago. Similarly, 30-year FHA mortgages are at 6.656%, slightly higher than the 6.603% recorded a week ago but nearly unchanged from a month ago. 30-year VA mortgages are at 6.433%, a marginal increase from 6.424% a week ago but down from 6.551% a month ago. 30-year USDA mortgages are at 6.491%, down from 6.545% a week ago but slightly higher than the 6.405% recorded a month ago. 15-year conventional mortgages are at 5.964%, down from 6.001% a week ago and 6.096% a month ago.

Despite expectations that mortgage rates would ease with the Federal Reserve's reduction of the federal funds rate last September, rates have remained relatively stable. In January 2025, the average rate for a 30-year, fixed-rate mortgage exceeded 7% for the first time since May 2024, a significant increase from the record-low average of 2.65% observed in January 2021. Experts suggest that mortgage rates in the 2% to 3% range are unlikely to return in the near future, but rates around the 6% level are possible if inflation is controlled and economic optimism prevails.

Rates saw a slight decrease at the end of February, falling closer to the 6.5% mark, but briefly dipped below 6.5% in early April before rising again. Uncertainty surrounding economic policies and potential labor market constrictions has led some analysts to worry about inflation resurfacing, impacting mortgage rates. Homebuyers are advised to explore methods such as negotiating rate buydowns with builders when purchasing newly constructed homes to make their purchases more manageable.

To secure the best mortgage rate, applicants should focus on maintaining excellent credit, a low debt-to-income ratio, and getting prequalified with multiple lenders. A top-tier credit score of 740 or higher is recommended for securing a low rate. A debt-to-income ratio of 36% or below is typically best for mortgage approval, though ratios as high as 43% may be approved. Comparing offers from large banks, local credit unions, and online lenders can help applicants evaluate their options and find the best fit.

Historically, mortgage rates around 7% are not unusually high. From the 1970s through the 1990s, such rates were more or less the norm, with significant spikes in the early 1980s. The health of the U.S. economy, national debt, demand for home loans, and the Federal Reserve's policies all play crucial roles in determining mortgage rates. The Fed's balance sheet management, including the buying and selling of assets, can significantly impact mortgage rates, even more so than changes to the federal funds rate.

Comparing rates on different types of loans and shopping around with various lenders are essential steps in obtaining the best mortgage. For applicants with excellent credit, conventional mortgages may be the best choice, while those with lower credit scores may benefit from FHA loans. Exploring options with different banks, credit unions, and online lenders can result in significant savings, with homebuyers potentially saving $600 to $1,200 annually by applying with multiple mortgage lenders.