Mortgage Rates Drop to 6.67% in 2025 – Lowest in 4 Months, What This Means for Homebuyers

The average 30-year mortgage rate has fallen for the third consecutive day, reaching 6.67% on Tuesday — the lowest level since March 2025. This steady decline is good news for prospective homebuyers and those looking to refinance, as most mortgage categories saw rate decreases.

Since rates vary significantly among lenders, it’s crucial to shop around and compare offers regularly, regardless of your loan type.

Today's Mortgage Rate Averages – May 9, 2025

The 30-year mortgage rate average decreased by 1 basis point on Tuesday, following drops of 7 and 6 basis points on Monday and Friday, respectively. This three-day streak has lowered the average by 14 basis points to 6.67%, the most affordable rate since March 27. Since July 1, the average has fallen by 41 basis points from 7.08%.

While these rates remain elevated compared to February's 6.36%, they are substantially below the historic 23-year peak of 8.01% recorded in October. This trend reflects broader market shifts and monetary policy effects.

Rates on 15-year mortgages also declined, dropping 2 basis points to 5.79%, the lowest since February. The 15-year rate remains well below last fall’s 7.08% peak, the highest since 2000. Similarly, 10-year fixed rates fell by 6 basis points to 5.65%, the lowest since February.

Jumbo 30-year mortgage rates decreased by 2 basis points to 6.90%, marking the lowest rate since early March and well below the May high of 7.30%. Though jumbo rates historical data prior to 2009 is limited, last fall's 8.14% spike was the highest in over two decades.

Weekly Freddie Mac Rate Update

Freddie Mac, the government-sponsored enterprise that purchases mortgages, reports a weekly average of 30-year rates every Thursday. Last week, their average inched up 1 basis point to 6.78%. Freddie Mac’s data differs slightly from daily averages because it blends rates from the previous five days. Additionally, loan qualification criteria vary between Freddie Mac’s methodology and other industry sources.

Use our Mortgage Calculator to estimate monthly payments for different loan scenarios.

Important Considerations

Keep in mind that advertised teaser rates online are often lower than actual averages because they may require upfront points or assume extremely high credit scores and smaller loan amounts. Your final mortgage rate will depend on your creditworthiness, income, loan size, and other factors.

What Influences Mortgage Rate Changes?

Mortgage rates fluctuate due to a complex mix of factors, including:

• Trends in the bond market, especially yields on 10-year Treasury notes
• The Federal Reserve’s monetary policies related to bond buying and government-backed mortgage funding
• Competition among lenders and across loan products

It’s challenging to attribute rate changes to any single factor because they often interact simultaneously.

In 2021, mortgage rates remained low largely due to the Federal Reserve’s bond-buying program in response to pandemic-related economic challenges. However, beginning in November 2021, the Fed began tapering these purchases, ending them by March 2022. Following that, the Fed raised the federal funds rate aggressively to combat inflation, indirectly pushing mortgage rates higher.

Despite holding the federal funds rate steady since July 2024, inflation remains above the Fed’s 2% target. The Fed has signaled caution in cutting rates until inflation shows a clear downward trend. Four more Fed meetings are scheduled for 2025, with the next concluding on July 31.

How We Track Mortgage Rates

The national and state mortgage rate averages are sourced from Zillow Mortgage API, assuming an 80% loan-to-value ratio and credit scores between 680 and 739. These reflect realistic rates borrowers can expect, differing from promotional teaser rates. © Zillow, Inc., 2024. Use subject to Zillow Terms of Use.

Discover engaging topics and analytical content in Personal Finance News as of 23-04-2024. The article titled " Mortgage Rates Drop to 6.67% in 2025 – Lowest in 4 Months, What This Means for Homebuyers " provides new insights and practical guidance in the Personal Finance News field. Each topic is meticulously analyzed to deliver actionable information to readers.

The topic " Mortgage Rates Drop to 6.67% in 2025 – Lowest in 4 Months, What This Means for Homebuyers " helps you make smarter decisions within the Personal Finance News category. All topics on our website are unique and offer valuable content for our audience.