Mortgage Rates Take a Step Back: What Homebuyers Need to Know

Note: Mortgage rate updates were paused on Monday, May 26, in observance of Memorial Day. Today's insights reflect the data as of Friday, May 23.

After hitting a peak unseen since last May, 30-year mortgage rates have retreated slightly, now averaging 7.12%. This decline extends across various loan types, providing some breathing room for prospective buyers.

Mortgage rates fluctuate significantly between lenders, so shopping around remains crucial to finding the best deal regardless of your loan type.

Latest New Purchase Mortgage Rate Averages

The 30-year fixed-rate mortgages for new home purchases dipped by 0.03%, settling at 7.12%, down slightly from Thursday's 7.15%, which marked the highest level in over a year.

Back in September, 30-year rates experienced a historic drop to a two-year low of 5.89%, which was nearly 1.25 percentage points lower than current rates. Although today's rates are higher than that low, they remain significantly better than the late 2023 peak of 8.01%, the highest in 23 years.

15-year mortgage rates also declined by 0.03%, averaging 6.10%. This is an improvement from the mid-April peak of 6.31%, the highest in nearly a year, and nearly a full percentage point below the October 2023 high of 7.08%. Notably, 15-year rates fell to a two-year low of 4.97% last September.

Jumbo 30-year mortgage rates saw a more pronounced drop of 0.06%, now averaging 7.10% after reaching a 10-month high of 7.16% the previous day. Last fall, these jumbo rates hit a 19-month low at 6.24%, while the October 2023 peak of 8.14% was the most expensive in over two decades.

Weekly Freddie Mac Mortgage Rate Update

Every Thursday, Freddie Mac publishes a weekly average of 30-year mortgage rates. Last week, the rate nudged up by 0.05% to 6.86%. This is higher than the September low of 6.08%, but well below the October 2023 peak of 7.79%, which was a 23-year high.

Freddie Mac calculates a weekly average based on five days of data, differing from our daily averages, which provide a more immediate snapshot. Additionally, differences in loan qualification criteria between Freddie Mac and other sources may result in varied rate averages.

Use our Mortgage Calculator to estimate monthly payments tailored to your loan scenarios.

Important Considerations

Published averages differ from the promotional teaser rates often advertised online, which tend to highlight the most favorable rates available. These teaser rates may require upfront points or assume ideal borrower profiles with high credit scores or smaller loan amounts. Your actual rate will depend on your unique financial profile, including credit score and income.

What Drives Mortgage Rate Fluctuations?

Mortgage rates are influenced by a complex mix of economic and industry factors, including:

• Movements in the bond market, especially 10-year Treasury yields
• The Federal Reserve's monetary policies, particularly regarding bond purchases and mortgage-backed securities
• Competition among lenders and variations across loan products

Because multiple factors often act simultaneously, pinpointing a single cause for rate changes is challenging.

In 2021, low mortgage rates were supported by the Fed's aggressive bond-buying program responding to the economic impact of the pandemic. However, starting November 2021, the Fed began tapering these purchases, completing the process by March 2022.

Between then and July 2023, the Fed raised the federal funds rate by 5.25 percentage points over 16 months to combat inflation. Although the federal funds rate does not directly set mortgage rates, its rapid increase has significantly influenced mortgage rate trends upward.

The Fed held rates steady for nearly 14 months starting July 2023, then initiated cuts in September, November, and December. Yet, in its March 2025 meeting, the Fed paused further rate reductions, indicating a possibility of extended periods without cuts. The median forecast suggests only two additional quarter-point cuts may occur this year amid five remaining rate-setting meetings, implying continued stability in mortgage rates.

Our Mortgage Rate Tracking Approach

The national and state mortgage rate averages presented derive from the Zillow Mortgage API, assuming an 80% loan-to-value ratio (20% down payment) and credit scores between 680 and 739. These figures reflect typical borrower rates and may differ from advertised promotions or your personal loan terms. © Zillow, Inc., 2025. Use is subject to Zillow Terms of Use.

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