Mortgage Rates Rise 4 Basis Points to 6.762% Amid Market Fluctuations

On July 16, 2025, the average interest rate for a 30-year, fixed-rate conforming mortgage loan in the U.S. rose to 6.762%, marking an increase of approximately 4 basis points from the previous day and a similar rise compared to a week ago. This slight uptick in mortgage rates reflects the ongoing fluctuations in the housing market, where rates have been hovering near the 7% mark for some time.

The current rate for a 30-year conventional mortgage stands at 6.762%, up from 6.724% a week ago and 6.817% a month ago. Similarly, the 30-year jumbo mortgage rate is at 6.934%, increasing from 6.810% a week ago and 6.962% a month ago. For government-backed loans, the 30-year FHA mortgage rate is 6.473%, down from 6.525% a week ago and 6.603% a month ago. The 30-year VA mortgage rate is 6.386%, up from 6.337% a week ago and 6.424% a month ago. The 30-year USDA mortgage rate is 6.514%, up from 6.433% a week ago and 6.545% a month ago. The 15-year conventional mortgage rate is 5.903%, up from 5.803% a week ago and 6.001% a month ago.

Despite the Federal Reserve's rate cuts last September, mortgage rates have not decreased as expected. Instead, they briefly declined before surging back up. By January 2025, the average rate on a 30-year, fixed-rate mortgage exceeded 7% for the first time since May 2024, a stark contrast to the historic low of 2.65% recorded in January 2021 during the pandemic. Experts agree that mortgage rates in the 2% to 3% range are unlikely to return without another major economic disruption. However, rates around the 6% mark are achievable if inflation is managed and economic prospects improve.

In early April, mortgage rates briefly dipped below 6.5% before rising again. Current economic uncertainties, including potential policy changes and labor market concerns, add to the volatility in mortgage rates. Homebuyers are advised to explore options like rate buydowns with builders when purchasing newly constructed properties to mitigate the impact of high rates.

To secure the best mortgage rate, homebuyers should focus on maintaining excellent credit, keeping a low debt-to-income ratio, and getting prequalified with multiple lenders. A credit score of 740 or higher is considered top tier for securing lower rates. A debt-to-income ratio of 36% or below is typically preferred by lenders, though approvals can be granted with a ratio as high as 43%. Comparing offers from large banks, local credit unions, and online lenders can help homebuyers find the most favorable terms.

Historically, mortgage rates around 7% are not unusually high. From the 1970s through the 1990s, such rates were common, with a significant spike in the early 1980s when rates exceeded 18%. The current high rates are a result of normal economic conditions rather than government intervention aimed at preventing recession. This historical perspective offers little consolation to homeowners locked into low pandemic-era rates, a situation known as the “golden handcuffs.”

Several factors influence mortgage interest rates, including the state of the economy, inflation expectations, national debt, demand for home loans, and the Federal Reserve's decisions. Lenders raise rates to protect profits in anticipation of inflation and to cover costs when loan demand is high. The Federal Reserve's management of the federal funds rate and its balance sheet also play crucial roles in determining mortgage rates. The Fed's balance sheet, which includes assets like mortgage-backed securities, can significantly impact long-term financial products.

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 benefit from government-backed loans like FHA. Exploring options with different lenders can result in significant annual savings, as indicated by Freddie Mac research. In a high-interest rate market, homebuyers may save $600 to $1,200 annually by applying with multiple mortgage lenders.