Mortgage Rates Rise Slightly, 30-Year Fixed at 6.717%

On July 15, 2025, the average interest rate for a 30-year, fixed-rate conforming mortgage loan in the U.S. stood at 6.717%, marking a slight increase of approximately 2 basis points from the previous day. This rate is marginally lower than the rate observed a week ago, which was 6.724%. The current rate also reflects a decrease from the rate recorded a month ago, which was 6.781%.

For 30-year jumbo mortgages, the current rate is 6.963%, up from 6.810% a week ago and 6.928% a month ago. The 30-year FHA mortgage rate is 6.533%, slightly higher than the 6.525% recorded a week ago but lower than the 6.545% from a month ago. The 30-year VA mortgage rate is 6.380%, up from 6.337% a week ago and slightly higher than the 6.399% from a month ago. The 30-year USDA mortgage rate is 6.438%, almost unchanged from the 6.433% a week ago but lower than the 6.495% from a month ago. The 15-year conventional mortgage rate is 5.944%, up from 5.803% a week ago but lower than the 6.020% from a month ago.

The recent trends in mortgage rates reflect a broader economic context. Many had anticipated that mortgage rates would ease as the Federal Reserve began reducing the federal funds rate last September. However, this did not materialize, and rates have remained relatively high. By 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. This shift is attributed to the government's efforts to boost the economy and prevent a pandemic-induced downturn.

Experts suggest that mortgage rates in the 2% to 3% range are unlikely to return in the near future. However, rates around the 6% level are possible if the U.S. succeeds in controlling inflation and lenders feel optimistic about the economic outlook. There was a slight decrease in rates at the end of February, falling closer to the 6.5% mark, but this was short-lived. Rates briefly dipped below 6.5% in early April before skyrocketing again. The uncertainty surrounding economic policies, such as tariffs and deportations, has led some analysts to worry about potential constrictions in the labor market and resurgent inflation. Despite these challenges, homebuyers can still find methods to make their purchases more manageable, such as negotiating rate buydowns with builders when buying newly constructed homes.

To secure the best mortgage rate, homebuyers should focus on their financial profile. Ensuring excellent credit is crucial, as a higher credit score can significantly lower the interest rate. Maintaining a low debt-to-income (DTI) ratio is also important, with a DTI of 36% or below being ideal. Getting prequalified with multiple lenders, including large banks, local credit unions, and online lenders, can help homebuyers compare offers and find the best deal. It is essential to recognize that some estimates may involve purchasing mortgage discount points, which can affect the overall cost.

Historically, mortgage rates around 7% are not unusually high. From the 1970s through the 1990s, such rates were more or less the norm, with a significant spike in the early 1980s. In fact, September, October, and November of 1981 all saw mortgage interest rates exceeding 18%. This historical perspective offers little consolation to homeowners who may want to move but are locked in with a once-in-a-lifetime low interest rate, a situation known as the “golden handcuffs.”

Several factors impact mortgage interest rates, with the health of the U.S. economy being the biggest driver. When lenders worry about inflation, they can bump up rates to protect their profits. The national debt is another significant factor, as increased government borrowing can push interest rates higher. Demand for home loans also matters, with low demand potentially leading to lower rates and high demand potentially leading to higher rates. The Federal Reserve plays a key role by changing the federal funds rate and by buying or selling assets. While changes to the federal funds rate often influence mortgage rates, the Fed's balance sheet activities, such as buying mortgage-backed securities, can have an even more significant impact.

Comparing rates on different types of loans and shopping around with various lenders are essential steps in obtaining the best mortgage. For those with excellent credit, a conventional mortgage might be the right choice. However, for those with lower credit scores, an FHA loan may provide an opportunity where a conventional loan would not. Exploring options with different banks, credit unions, and online lenders can make a significant difference in overall costs. Freddie Mac research indicates that in a market with high interest rates, homebuyers may be able to save $600 to $1,200 annually if they apply with multiple mortgage lenders.