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Buying a Home Will Be More Affordable Than Renting in 2025

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Is owning a home just a pipe dream these days? With prices seemingly sky-high and interest rates doing a little dance, it sure can feel that way. But hold on a minute – contrary to what you might think, owning a home is actually more affordable than renting in 2025 in a surprising number of places across the United States. Yes, you read that right. Even though the upfront cost of buying can feel like climbing Mount Everest, once you’re in, your monthly housing costs might actually be less than what your neighbor is shelling out for rent. Let's dive into why this is the case, and what it means for you.

Buying a Home Will Be More Affordable Than Renting in 2025

The Surprising Numbers: Homeownership vs. Renting in 2025

I know, I know, it sounds a bit crazy. For years, the narrative has been about how renting is the only option for many, especially younger folks trying to get their financial footing. And in some super-expensive cities, that still holds true. But according to a recent report from ATTOM, a property data company, the tide is turning in many areas.

Their 2025 Rental Affordability Report crunched the numbers and found that in nearly 60% of counties across the US, the major costs of owning a typical single-family home eat up a smaller chunk of average wages than renting a three-bedroom apartment. Think about that for a second. In more than half of the places they looked at, it’s easier on your wallet each month to be a homeowner than a renter.

Now, before you start packing boxes and browsing Zillow, let’s be real. This isn't a simple open-and-shut case. Both owning and renting are putting a serious squeeze on people's budgets. We're talking about housing costs – whether rent or mortgage – gobbling up anywhere from 25% to a whopping 60% of people's paychecks in many areas. That's a big chunk! But the surprising takeaway is that, in a lot of places, the owning chunk is smaller.

Why is Owning Becoming More Affordable Than Renting?

You might be scratching your head right now. Homes are expensive, right? And haven’t prices been going up? Yes, and yes. But the story is a bit more nuanced than just sticker prices.

Here’s what’s happening:

  • Home prices are rising, but so are rents, and sometimes even faster: While home prices have definitely gone up, especially in recent years, rents have been on a rocket ship in many cities. The ATTOM report actually found that in about two-thirds of the counties they studied, home prices either rose faster or declined less than rents over the past year. This means that the cost of renting is catching up, and in some cases, surpassing the cost of owning.
  • Fixed Mortgages vs. Variable Rents: This is a big one that often gets overlooked. When you buy a home with a fixed-rate mortgage, your principal and interest payment stays pretty much the same for the life of the loan. Sure, property taxes and insurance can change, but your biggest housing expense is locked in. Rent, on the other hand, is at the mercy of the market and your landlord. It can go up every year, and often does! In an environment where rents are climbing, that fixed mortgage payment starts to look really appealing.
  • Wages are (slightly) keeping pace in some areas: While it's definitely not uniform across the board, wages have been growing in some parts of the country. In fact, the report mentioned that in almost three-quarters of the areas they analyzed, wages grew faster than rents. This helps to offset some of the rising housing costs, making both renting and owning a bit more manageable in those locations, but ownership is pulling ahead.

Regional Differences: Where Owning Wins (and Where Renting Still Reigns)

Now, let's zoom out and look at the map. This affordability picture isn't the same everywhere. Where you live makes a huge difference.

  • Midwest and South: The Sweet Spots for Homeownership: If you're looking for a place where owning is significantly more affordable than renting, head towards the Midwest or the South. The report highlights that in about 80% of counties in the Midwest and 60% in the South, owning a home is the more financially sound choice. Places like Detroit, Birmingham, and Pittsburgh are standing out as surprisingly affordable for homebuyers.
  • Northeast: A Mixed Bag: The Northeast is a bit more of a mixed bag. In about half of the counties in this region, owning is still more affordable. However, there are definitely pockets of high-cost areas where renting might be less of a strain, at least monthly.
  • West Coast: Renting Still Has the Edge: The West Coast, especially California, is where renting often remains the more financially viable option. In about 80% of western markets, renting a home is easier on your wallet. Think about cities like Oakland, Honolulu, and San Jose – these are places where the housing market is notoriously expensive, and even with rising rents, the sheer cost of homeownership can be overwhelming for many.

To give you some concrete examples from the report:

  • Places where owning is WAY more affordable than renting:
    • Suffolk County, NY (Long Island): Homeownership costs eat up about 59% of average wages, while rent is a staggering 159%!
    • Atlantic County, NJ (Atlantic City): 48% for owning vs. 111% for renting.
    • Collier County, FL (Naples): 79% for owning vs. 127% for renting.
  • Places where renting is still more affordable:
    • Alameda County, CA (Oakland): Rent is 48% of wages, while owning is a hefty 87%.
    • Honolulu County, HI: 64% for renting vs. 103% for owning.
    • San Mateo County, CA: 31% for renting vs. 69% for owning.

It's pretty clear when you look at these numbers that your location plays a massive role in whether owning or renting makes more financial sense.

The Catch: The Down Payment Hurdle and Other Ownership Costs

Okay, so owning might be more affordable monthly in many places. But let's not forget the elephant in the room: the down payment. Rob Barber, CEO at ATTOM, put it perfectly: “Homeownership is somewhat more attainable for those who can gather the necessary resources to cover down payments that often surpass $200,000.”

That’s a HUGE “if.” Saving up a down payment, especially a traditional 20% down payment, is a monumental task for most people, especially in today's economy. This is often the biggest barrier to entry for homeownership, regardless of monthly affordability.

And it's not just the down payment. Homeownership comes with a whole host of other costs that renters don't have to worry about:

  • Property Taxes: These can vary widely depending on location and can add a significant chunk to your monthly housing expenses.
  • Homeowner's Insurance: You need to protect your investment, and insurance is a must.
  • Maintenance and Repairs: Leaky faucet? Broken appliance? That's all on you as a homeowner. Unexpected repairs can pop up at any time and can be costly.
  • Private Mortgage Insurance (PMI): If you put down less than 20%, you'll likely have to pay PMI, which adds to your monthly payment.

Renters, on the other hand, have more predictable monthly housing costs. Their landlord is typically responsible for repairs and maintenance. This predictability can be a big advantage for budgeting and financial planning.

Beyond the Numbers: Why Owning Can Still Be a Smart Move

Even with the down payment hurdle and extra costs, I still believe that for many people, owning a home is a worthwhile goal. It’s not just about the monthly payment comparison. It’s about building long-term wealth and security.

Here's why I'm still a believer in the dream of homeownership:

  • Building Equity: When you pay rent, that money is gone. It's helping your landlord build their wealth, not yours. When you make mortgage payments, you're building equity in an asset that, historically, tends to appreciate over time. That equity can be a powerful tool for your future financial security.
  • Inflation Hedge: As prices rise, your fixed mortgage payment becomes a smaller and smaller percentage of your income over time (assuming your income also rises, hopefully!). Rent, on the other hand, is likely to keep pace with inflation, if not outpace it.
  • Stability and Control: As a homeowner, you have more control over your housing situation. You can renovate, decorate, and put down roots in your community. You're not at the mercy of a landlord deciding to raise your rent or sell the property.
  • Potential Tax Benefits: Depending on your situation and location, you may be able to deduct mortgage interest and property taxes, which can lower your overall tax burden.

Of course, homeownership isn't for everyone. It comes with responsibilities and risks. It's less flexible than renting if you need to move quickly. And in some markets, it's just not financially feasible right now.

My Takeaway: Do Your Homework and Look at the Big Picture

So, is owning a home more affordable than renting in 2025? The answer, surprisingly, is yes in many parts of the country. But it's not a simple yes or no. It depends heavily on where you live, your financial situation, and your long-term goals.

If you're thinking about buying a home, don't just assume it's out of reach because of headlines about high prices. Do your research. Look at the local market data. Talk to a financial advisor and a mortgage lender. Compare the monthly costs of owning versus renting in your area.

And most importantly, think about the big picture. Homeownership is a long-term investment. It's about more than just the monthly payment. It’s about building wealth, creating stability, and having a place to call your own. And in 2025, in many corners of America, that dream might just be more attainable than you think.

Buying a Home in 2025? Make a Smart Investment with Norada

With homeownership becoming more affordable than renting in 2025, now is the time to invest in turnkey rental properties for long-term financial growth.

Secure your future with high-quality, cash-flowing real estate investments that build wealth while providing consistent rental income.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now 

US Dollar Plummets to 3-Year Low: What It Means for Your Wallet

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The US Dollar, long a cornerstone of global financial stability, has recently fallen to its lowest level in three years, sparking widespread concern and discussion. As of June 27, 2025, the US Dollar Index (DXY) has dropped to around 97, a level not seen since March 2022, representing a decline of over 10% this year alone.

This significant event has captured the attention of investors, policymakers, and consumers, raising questions about its causes and consequences. Let's explore the reasons behind the dollar’s decline, its implications for Americans and the global economy, and what the future might hold for the world’s reserve currency.

US Dollar Plummets to Three-Year Low: Causes of the Decline

The US Dollar’s fall is driven by a combination of economic, political, and market factors:

Economic Uncertainty and Tariffs

President Donald Trump’s economic policies, including the “Liberation Day” tariffs and the proposed “Big, Beautiful Bill,” have introduced significant uncertainty. These measures, aimed at protecting US industries, have raised fears of trade wars and economic slowdowns. An X post from @nexta_tv noted, “Due to U.S. tariffs, investors are losing trust in the currency as a ‘safe haven’ and are effectively pulling out” X Post. The “Big, Beautiful Bill” could add over $2.5 trillion to the federal debt, further eroding investor confidence (TIME).

Federal Reserve Independence Concerns

Speculation about changes in Federal Reserve leadership has significantly impacted the dollar. Reports indicate that President Trump is considering announcing a new Federal Reserve Chair before Jerome Powell’s term ends in May 2026. The prospect of a dovish chair who might cut interest rates has led to a decline in US bond yields, weakening the dollar. Kathleen Brooks, research director at XTB, stated, “This could undermine Powell’s final months as chair. The consensus is that Trump will pick a dovish chair, who is likely to cut interest rates. This triggered a decline in U.S. bond yields, which has weighed on the dollar” (MarketWatch).

Global Economic Shifts

The perception of the US as a safe haven for investments is waning. Investors are diversifying away from US assets, reflecting a broader shift in global economic power. Bilge Erten, an economist at Northeastern University, observed, “The US is no longer seen as a safe haven for investments. The dollar’s decline reflects a broader shift in global economic power” (TIME). This shift is evident in the dollar’s performance against other currencies, with the euro reaching its strongest level since September 2021 and the dollar hitting a decade-and-a-half low against the Swiss franc (Reuters).

Market Dynamics

The dollar has weakened against major currencies, including the euro, Swiss franc, and Japanese yen. The US Dollar Index fell to 97, with the euro up 0.33% at $1.1697 and the British pound trading above $1.3750 for the first time since 2021. An X post from @Investingcom reported, “U.S. DOLLAR INDEX FALLS TO THREE-YEAR LOW OF 97.68” X Post.

Currency Pair Performance Details
USD/EUR Down 0.33% Euro at $1.1697, strongest since September 2021
USD/CHF Decade-and-a-half low Swiss franc at 0.80030
USD/JPY Down 0.57% Japanese yen at 144.415
USD/GBP Weakened British pound above $1.3750, first time since 2021

Implications of the Dollar’s Fall

The dollar’s decline has significant consequences for both the US and the global economy:

For Americans

A weaker dollar increases the cost of imported goods and international travel, potentially raising the cost of living. TIME reported, “Americans’ wallets could be set to take a hit as the U.S. dollar has tumbled to a three-year low amid concerns about the stability and strength of the US economy.” However, it also makes US exports more competitive, benefiting domestic businesses. For example, industries like manufacturing and agriculture could see increased demand for their products abroad.

For the Global Economy

A weaker dollar can lead to higher inflation in countries reliant on US imports, as goods become more expensive. It also affects the value of dollar-denominated assets held by foreign investors, potentially prompting capital flight from the US. Additionally, the cost of servicing US debt held by foreign entities rises, complicating fiscal management.

For Financial Markets

The dollar’s decline has contributed to record highs in stock markets, as a weaker currency boosts corporate earnings when repatriated. However, it also introduces volatility, particularly for investors holding dollar-denominated assets. Michael Metcalfe from State Street noted, “The dollar is in a structural decline. Investors are the most negative on the dollar since the COVID pandemic.”

Expert Opinions and Market Reactions

The financial community has been vocal about the dollar’s decline:

  • Bilge Erten, Northeastern University: “The US is no longer seen as a safe haven for investments. The dollar’s decline reflects a broader shift in global economic power” (TIME).
  • Michael Metcalfe, State Street: “The dollar is in a structural decline. Investors are the most negative on the dollar since the COVID pandemic” (Reuters).
  • Kathleen Brooks, XTB: “The talk of an early Fed Chair nomination has undermined Powell’s final months as chair. The market expects a dovish replacement, which has triggered a decline in US bond yields and weighed on the dollar” (MarketWatch).

On X, the topic is trending, with users expressing concern and analyzing implications. For instance, @Han_Akamatsu posted, “The dollar is taking a serious hit right now… The Fed is cornered right now. Can’t hike, can’t cut. The world is rejecting the U.S. debt, and the dollar is…” X Post. Another post from @MarioNawfal stated, “U.S. DOLLAR HITS 3-YEAR LOW AS TRUMP RATTLES THE FED — AND MARKETS PANIC” X Post.

Historical Context

The US Dollar has experienced fluctuations in the past. It spiked in value around 2015, deteriorated during the COVID-19 pandemic, and rose again in subsequent years. Historically, the dollar was notably high in 2002 and 1985 before experiencing sharp declines. The current drop, if sustained, could mark the largest first-half-year decline since the early 1970s, when currencies began free-floating.

Future Outlook

The future of the US Dollar is uncertain and depends on several factors:

  • Federal Reserve Decisions: The outcome of the Fed Chair nomination and subsequent monetary policy will be critical. A dovish chair could lead to further rate cuts, potentially weakening the dollar further.
  • US Economic Policies: The impact of tariffs and fiscal policies, such as the “Big, Beautiful Bill,” will influence investor confidence and economic stability.
  • Global Economic Trends: Continued diversification away from US assets could sustain downward pressure on the dollar.

The coming months will provide more clarity, but for now, the dollar’s decline highlights the interconnectedness of global economies and the fragility of financial stability.

Bottom Line:

The US Dollar’s fall to a three-year low is a complex issue driven by economic policies, Federal Reserve uncertainties, and global economic shifts. While it poses challenges for Americans through higher costs, it also offers opportunities for exporters. Globally, the decline could reshape investment patterns and economic relationships. As policymakers, businesses, and investors navigate this evolving landscape, the dollar’s trajectory will remain a critical focus for the global economy.

Protect Your Wealth as the Dollar Weakens

With the U.S. Dollar hitting a three‑year low, savvy investors are turning to tangible assets that hold value.

Norada offers turnkey rental properties in resilient U.S. markets—providing passive income and serving as a hedge against currency depreciation.

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(800) 611-3060

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Current ARM Mortgage Rates Are Down From Last Week – June 28, 2025

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Are you thinking about buying a home or refinancing in June 2025? One of the most important things to consider is interest rates for mortgages. As of June 28, 2025, the national average 5-year ARM (Adjustable-Rate Mortgage) rate is 7.49%. This is down 7 basis points from the previous week. But is an ARM right for you? Let's dive into the details.

Current ARM Mortgage Rates for June 28, 2025: What You Need to Know

What is an ARM? Briefly Explained

Before we delve deeper, let's quickly define what an ARM mortgage is. An ARM is a type of mortgage where the interest rate is fixed for an initial period, and then it adjusts periodically based on market conditions. The “5-year ARM” means the rate is fixed for the first five years and can then change annually.

A Snapshot of June 28, 2025 Mortgage Rates

Here's a summary of the mortgage rates as of the latest update provided by Zillow on Saturday, June 28, 2025.

  • 30-Year Fixed-Rate Mortgage: 6.73% (down 18 basis points from the previous week)
  • 15-Year Fixed-Rate Mortgage: 5.74% (down 1 basis point from the previous week)
  • 5-Year ARM: 7.49% (down 7 basis points from the previous week)

It's worth noting that mortgage rates can fluctuate daily, so it's advisable to monitor them closely if you are planning to take out a mortgage soon.

A Detailed Look at ARM Rates

Let's zoom in on ARM mortgage rates in various buckets.

Conforming Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
7-year ARM 7.29% down 0.15% 7.80% down 0.01%
5-year ARM 7.49% up 0.29% 7.97% up 0.17%
3-year ARM — 0.00% — 0.00%

Jumbo Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
7-year ARM 7.42% down 0.10% 8.00% down 0.06%
5-year ARM 7.31% down 0.41% 7.83% down 0.26%
3-year ARM — 0.00% — 0.00%

ARM vs. Fixed-Rate Mortgages: Which is Right for You?

The big question: should you go with an ARM or a fixed-rate mortgage? Here's how I usually advise people to think about it:

  • Fixed-Rate Mortgages: These offer stability and predictability. Your interest rate remains the same for the life of the loan, making it easier to budget. This is a safer pick, especially if you plan to stay in your home for longer.
  • ARMs: These can be attractive because they often start with lower interest rates than fixed-rate mortgages. This means lower monthly payments in the initial years. However, the rate can adjust (go up or down) after the initial fixed period, introducing uncertainty. ARMs might be a good option if you:
    • Plan to move or refinance before the rate adjusts.
    • Believe that interest rates will decrease in the future.
    • Can comfortably afford higher payments if the rate increases.

Here's a quick comparison table:

Feature Fixed-Rate Mortgage Adjustable-Rate Mortgage (ARM)
Interest Rate Fixed for the life of the loan Adjusts after initial fixed period
Monthly Payment Predictable and consistent Can change after the initial fixed period
Risk Lower risk, predictable costs Potentially higher risk due to rate adjustments
Best For Long-term homeowners, risk-averse buyers Short-term homeowners, rate decrease believers

Factors Influencing ARM Rates

Several factors impact ARM rates. Understanding these can help you make more informed decisions.

  • The Prime Rate: This is the interest rate that banks charge their best customers. ARM rates are often tied to the prime rate, so when the prime rate goes up or down, ARM rates tend to follow.
  • The Federal Reserve (The Fed): The Fed sets the federal funds rate, which influences borrowing costs across the economy, including mortgage rates.
  • Inflation: When inflation is high, interest rates tend to rise to compensate lenders for the decreased purchasing power of future payments.
  • Economic Growth: A strong economy often leads to higher interest rates as demand for borrowing increases.
  • Global Events: Major global events, such as economic crises or geopolitical instability, can impact financial markets and influence interest rates.

Expert Advice:

It's not enough to say interest rates are trending one way or the other. It also helps to consider the broader picture. Are jobs being added to the economy? Are average wages going up? What is the unemployment rate? Are US treasuries yielding a greater ROI than real estate? These are some of the more important things to consider when trying to assess the current and future state of mortgage rates.

Tips for Securing the Best ARM Rate

If you're leaning toward an ARM, here are some tips to increase your chances of getting a favorable rate:

  • Improve Your Credit Score: A higher credit score typically qualifies you for lower interest rates. Review your credit report and address any errors or outstanding debts.
  • Save for a Larger Down Payment: A larger down payment reduces the amount you need to borrow, which can result in a lower interest rate.
  • Shop Around: Don't settle for the first offer you receive. Compare rates from multiple lenders to find the best deal.
  • Negotiate: Don't be afraid to negotiate with lenders. They may be willing to offer a lower rate to earn your business.
  • Consider Rate Caps: ARM loans often have rate caps that limit how much the interest rate can increase during each adjustment period and over the life of the loan. Understanding these caps can help you manage potential risks.

Looking Ahead: What's Expected for Mortgage Rates?

Predicting future mortgage rates is challenging, but here's what to consider:

  • Economic Forecasts: Pay attention to economic forecasts from reputable sources, such as the Federal Reserve, major banks, and financial analysts. These forecasts often include predictions about economic growth, inflation, and interest rates.
  • Fed Policy: Keep an eye on the Federal Reserve's monetary policy decisions. Any changes to the federal funds rate can have a significant impact on mortgage rates.
  • Market Trends: Monitor trends in the bond market, as mortgage rates often track the yield on 10-year Treasury bonds.

Mortgage rates are constantly changing, and it's crucial to stay informed to make the best financial decisions. Whether you opt for a fixed-rate mortgage or an ARM, understanding the current market conditions, your financial situation, and your long-term goals is key.

Capitalize on ARM Rates Before They Rise Even Higher

With fluctuating adjustable-rate mortgages (ARMs), savvy investors are exploring flexible financing options to maximize returns.

Norada offers a curated selection of ready-to-rent properties in top markets, helping you capitalize on current mortgage trends and build long-term wealth.

HOT NEW LISTINGS JUST ADDED!

Connect with an investment counselor today (No Obligation):

(800) 611-3060

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Mortgage Rates Today June 28, 2025: Rates See Big Drop Across the Board

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As of June 28, 2025, the average 30-year fixed mortgage rate has decreased to 6.74%, down from 6.75% in the previous week. This decline represents a drop of 17 basis points from last week’s average of 6.91%. If you're considering taking out a mortgage or refinancing your current home loan, knowing these updated rates will help you make informed financial decisions.

Mortgage Rates Today June 28, 2025: Rates See Big Drop Across the Board

Key Takeaways

  • The 30-year fixed mortgage rate is now at 6.74%.
  • The 15-year fixed mortgage rate has fallen to 5.74%.
  • Refinancing rates have seen some changes, with the 30-year fixed refinance rate rising to 7.12%.
  • Understanding what influences these rates can help you when entering the market.

Current Mortgage Rates

Today's mortgage rates show a dynamic landscape of options for prospective homebuyers and current homeowners looking to refinance. Below is a summary of the current rates as reported by Zillow:

Mortgage Type Current Rate 1-Week Change APR 1-Week APR Change
30-Year Fixed Rate 6.74% Down 0.17% 7.19% Down 0.18%
20-Year Fixed Rate 6.37% Down 0.21% 6.81% Down 0.14%
15-Year Fixed Rate 5.74% Down 0.22% 6.03% Down 0.23%
10-Year Fixed Rate 5.78% Down 0.15% 6.04% Down 0.03%
7-Year ARM 7.29% Down 0.15% 7.80% Down 0.01%
5-Year ARM 7.50% Up 0.30% 7.93% Up 0.14%

Additionally, if you are interested in government-backed loans, consider the following rates:

Government Loan Type Current Rate 1-Week Change APR 1-Week APR Change
30-Year Fixed Rate FHA 7.50% Up 0.18% 8.55% Up 0.19%
30-Year Fixed Rate VA 6.25% Down 0.15% 6.46% Down 0.15%
15-Year Fixed Rate FHA 5.84% Up 0.25% 6.81% Up 0.24%
15-Year Fixed Rate VA 5.76% Down 0.16% 6.10% Down 0.15%

Refinance Rates

Current refinance rates are also pivotal for homeowners looking to lower their payments or change their loan terms. Here’s how today’s refinance rates break down:

Refinance Loan Type Current Rate 1-Week Change APR 1-Week APR Change
30-Year Fixed Refinance 7.12% Up 0.12% 7.19% Down 0.18%
20-Year Fixed Refinance 6.37% Down 0.21% 6.81% Down 0.14%
15-Year Fixed Refinance 5.84% No Change 6.03% Down 0.23%
10-Year Fixed Refinance 5.78% Down 0.15% 6.04% Down 0.03%
5-Year ARM Refinance 7.47% Down 0.29% 7.93% Up 0.14%

Note that the 30-year fixed refinance rate has increased slightly; this indicates it’s a vital time to evaluate your refinancing options.

Mortgage Payments Under Current Rates

If you're curious about what your mortgage payments will look like under the current rates, here’s a breakdown of monthly payments for different loan amounts using the 30-year fixed rate of 6.74%.

Monthly Payment on a $300,000 Mortgage For a $300,000 mortgage, your monthly payment will be approximately $1,948. This amount includes principal, interest, property tax, and homeowners insurance, typical of fixed monthly payments.

Monthly Payment on a $400,000 Mortgage If you're looking at a $400,000 mortgage, the monthly payment comes to about $2,597. It's essential to factor in that for larger loan amounts, many lenders may require a larger down payment or stricter qualification criteria.

Monthly Payment on a $500,000 Mortgage Finally, for those with a $500,000 mortgage, expect to pay around $3,247 per month. As your mortgage increases, the financial responsibility escalates, making it crucial to evaluate your overall financial health and budget before committing.

These figures help give a clear view of what to expect based on current rates, and they can significantly aid in budgeting for a home purchase or refinancing strategy.

Factors Influencing Mortgage Rates

Understanding the mortgage rate's fluctuations requires a grasp of the crucial influences behind them. Three main factors that significantly impact mortgage rates include:

  1. The Federal Reserve: The Fed plays a pivotal role in influencing mortgage rates through its monetary policy. When the Fed sets lower interest rates to stimulate the economy, lenders often follow suit by lowering mortgage rates, making borrowing cheaper for homebuyers. Conversely, if the Fed raises rates to combat inflation, mortgage rates typically rise as well.
  2. Inflation: Inflation erodes the purchasing power of money which can directly impact mortgage rates. When inflation is on the rise, lenders adjust mortgage rates upwards to maintain their margins and to compensate for the decreased value of money over time. Keeping inflation in check is critical for stabilizing mortgage rates.
  3. 10-Year Treasury Yield: This yield is often seen as a benchmark for long-term mortgage rates. When investors expect strong economic growth, they tend to sell Treasury bonds, which drives the yield higher. A rising yield usually leads to higher mortgage rates, as lenders demand more return on their loans.

Additionally, broader economic conditions and the demand for home loans significantly play a role. For example, if consumer confidence is strong and more people are likely to apply for loans, lenders might increase rates to balance demand, thereby controlling the risk of lending.

Expert Rate Predictions for 2025

Economic forecasts for mortgage rates are varied. For instance, housing economists and organizations like the Mortgage Bankers Association (MBA) and Fannie Mae have provided insight into future trends:

  • Fannie Mae predicts that mortgage rates may hover around 6.5% by the end of 2025. They expect that if inflation is under control, there’s potential for rates to lower, influenced by periodic adjustments from the Fed.
  • The MBA also suggests that rates might stabilize slightly lower than current levels by the end of the year. Key factors in these predictions include the overall health of the housing market and the economic recovery journey.
  • Some experts foresee a gradual decrease in rates based on signs of easing inflation and more favorable economic conditions, which typically lead to lower interest demands from banks.
  • Conversely, predictions are often clouded with uncertainty due to global events, inflation pressures, and changes in government policy. It’s prudent for potential buyers and refinancing homeowners to stay updated as predictions can change based on the latest economic indicators.

Overall, monitoring these forecasts provides essential context for potential homebuyers and those looking to refinance.

Buying and Refinancing Considerations

With fluctuations in mortgage rates, it’s crucial for homebuyers and those considering refinancing to keep informed about the best practices for navigating this environment. Key strategies include:

  • Getting Pre-Approved: This will provide you with an idea of what you can afford and can set you up for a smoother closing process. Pre-approval helps in identifying appropriate price ranges and strengthens your negotiating position with sellers.
  • Shopping Around for Lenders: Different lenders may offer various rates and terms. It is wise to compare multiple lenders to find the best deal available for your specific circumstances. Interest rates can vary significantly depending on the lender's pricing structure and risk assessment.
  • Considering Temporary Rate Buydowns: Some buyers are looking into temporary buydown options to lower their mortgage rates for the initial years of their loans. A buydown is where the seller pays for the interest rate to be temporarily reduced, allowing buyers to enjoy lower payments initially.
  • Understanding the “Lock-in” Effect: Many homeowners are reluctant to sell due to enjoying low rates on their existing mortgages. This creates a limited inventory in the housing market, driving competition and raising prices for new buyers.

Invest Smarter in a High-Rate Environment

With mortgage rates remaining elevated this year, it's more important than ever to focus on cash-flowing investment properties in strong rental markets.

Norada helps investors like you identify turnkey real estate deals that deliver predictable returns—even when borrowing costs are high.

HOT NEW LISTINGS JUST ADDED!

Connect with a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now 

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Housing Market Forecast 2026: Will Prices Rise or Fall Next Year?

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The housing market has been a rollercoaster in recent years, with fluctuating interest rates, inventory shortages, and economic uncertainties leaving many wondering what lies ahead. While the National Association of Realtors (NAR) has provided detailed predictions for 2025, the focus of this article is on what might unfold in 2026.

Using NAR’s 2025 forecast as a foundation, we’ll explore potential trends, scenarios, and key factors that could shape the housing market in 2026. From mortgage rates to job growth and the persistent housing shortage, here’s what buyers, sellers, and homeowners might expect.

Housing Market Forecast 2026: Will Prices Rise or Fall Next Year?

Before diving into 2026, it’s crucial to understand the baseline provided by NAR’s 2025 predictions. According to NAR Chief Economist Lawrence Yun, the housing market in 2025 is expected to stabilize with modest growth. Key highlights include:

  • 3% growth in median home prices: A moderate increase driven by demand and limited supply.
  • Rebound in home sales: Existing-home sales are projected to rise by 6%, while new-home sales could jump by 10% compared to 2024.
  • Easing mortgage rates: Rates are anticipated to drop to around 6.4% by the end of 2025, making borrowing more affordable.
  • Continued job growth: An estimated 1.6 million new jobs in 2025 will bolster housing demand.
  • Low distressed sales: With serious mortgage delinquencies remaining minimal, there’s little risk of a foreclosure surge.

These trends set the stage for 2026, offering a glimpse into how the market might evolve. While specific data for 2026 isn’t available, we can project potential outcomes based on these 2025 indicators.

Potential Housing Market Trends for 2026

What might 2026 hold for the housing market? While exact predictions are impossible without new data, we can explore plausible scenarios based on the trajectory of 2025 trends. Here are some key possibilities:

1. Modest Price Growth Continues

If the factors supporting 2025’s 3% price growth—easing mortgage rates, steady demand, and limited supply—persist into 2026, home prices could see a similar or slightly higher increase. Should mortgage rates dip further below 6.4%, demand might surge, pushing prices up by 4% or more. However, if rates stabilize or rise slightly, growth could slow to 2-3%, reflecting a more balanced market.

2. Mortgage Rates: The Pivotal Factor

Mortgage rates remain the linchpin of the housing market. Yun has called them the “magic bullet,” and their direction in 2026 will be critical. If the Federal Reserve continues to ease rates beyond 2025, 2026 could see a stronger sales rebound and heightened price pressure. Conversely, if inflation resurges or economic conditions shift, rates might plateau or increase, cooling buyer enthusiasm and tempering price growth.

3. Sales Activity: Building on the Rebound

The anticipated 6% and 10% increases in existing- and new-home sales in 2025 suggest a market regaining momentum. If this trend carries into 2026, sales could rise further as more buyers enter the market, encouraged by lower rates and economic stability. However, any disruptions—such as an economic slowdown—could stall this progress, leading to flatter sales figures.

4. Inventory: A Persistent Challenge

The housing shortage, pegged at nearly 4 million homes by Realtor.com Chief Economist Danielle Hale, isn’t likely to resolve quickly. In 2026, tight inventory could continue to prop up prices, even if demand softens. On the flip side, a significant boost in new construction—spurred by 2025’s sales rebound—might ease supply constraints slightly, moderating price growth in some regions.

5. Economic Stability and Job Growth

If job growth remains robust in 2026, adding another 1.5-2 million jobs, it will reinforce housing demand. A strong labor market gives more people the confidence and means to buy homes, supporting both sales and prices. However, an economic downturn or stagnation could weaken this foundation, reducing buyer activity and slowing market growth.

The Housing Shortage: A Defining Influence in 2026

The chronic undersupply of homes will likely remain a dominant force in 2026. With a deficit of nearly 4 million units, the market is structurally tilted toward sellers. This scarcity supports price stability and growth, as demand continues to outstrip supply. Even if sales dip, the lack of homes will prevent significant price declines in most areas.

That said, new construction could offer some relief. Hale notes that newly built homes often come with builder incentives, such as slightly lower interest rates. In 2026, this trend might make new homes increasingly appealing, especially if mortgage rates hover above 6%. Builders may also ramp up production to capitalize on demand, potentially easing inventory pressures over time.

Job Growth: The Economic Backbone

Continued job growth is a cornerstone of NAR’s optimistic outlook. If the economy adds jobs at a pace similar to 2025’s 1.6 million, 2026 could see sustained housing demand. More jobs mean more first-time buyers, move-up buyers, and investors entering the market. However, this assumes economic stability. Any signs of a recession—rising unemployment, declining consumer confidence—could dampen demand and slow the market’s momentum.

Local Markets: The National Picture Doesn’t Tell All

While national trends provide a useful framework, housing markets are inherently local. In 2026, some regions might outperform the national average due to strong job growth, limited inventory, or high desirability—think tech hubs or coastal cities. Others, particularly areas with economic challenges or oversupply, could see stagnation or slight declines. Buyers and sellers must zoom in on local conditions to understand their specific market’s trajectory.

What Does This Mean for You?

Whether you’re buying, selling, or staying put, here’s how 2026’s potential trends could impact your decisions:

  • For Potential Buyers: Don’t bank on major price drops, but don’t fear a runaway surge either. Monitor mortgage rates closely—further declines could signal a prime buying window. Consider new homes for possible financing perks, and shop around for the best mortgage deal, as Hale advises.
  • For Sellers: A market with modest price growth and active buyers could favor sellers in 2026. Price competitively based on local data to attract interest, especially if inventory remains tight.
  • For Homeowners: Steady price growth boosts equity, but real estate is a long game. Focus on long-term value rather than short-term shifts.

Conclusion

The housing market in 2026 will build on the foundation laid in 2025, with NAR’s forecast suggesting a stabilizing landscape. Modest price growth, easing mortgage rates, and continued job creation could drive a healthy—if not spectacular—market. Yet uncertainties like mortgage rate fluctuations and economic conditions will keep things dynamic.

The persistent housing shortage will likely prevent steep declines, while local variations remind us that national trends are just part of the story. For anyone navigating the market in 2026, staying informed about both local and broader economic signals will be essential to making smart moves.

Predicting the future of the housing market is never an exact science. There are so many interconnected factors at play. However, the latest forecast from the National Association of Realtors provides a valuable insight into what the experts are expecting. While a 3% price growth in 2025 might not be earth-shattering, it suggests a degree of stability and continued moderate appreciation in the housing market. As always, staying informed about your local market and understanding the broader economic trends will be key to making informed decisions.

Plan Ahead with 2026 Housing Market Insights

The housing market is shifting—some regions are cooling while others remain resilient. Stay ahead of national trends by focusing on stable investment areas with long-term growth potential.

Norada helps investors like you discover turnkey real estate opportunities in cities forecasted for strong performance in both 2025 and 2026.

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Worst Places to Live in Florida for Families & Retirees in 2025

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So you're considering a move to Florida? Well, before you start packing your bags, it's essential to know which areas you might want to avoid. Whether you're planning a family life or looking for a relaxed retirement spot, Florida offers a range of options. However, there are certain places that may not be the best fit for families and retirees alike. In this article, we'll take a look at some of the worst places to live in Florida for families and retirees, helping you make a more informed decision about your next move.

Worst Places to Live in Florida for Families & Retirees in 2024 & 2025

1. Pahokee

Pahokee is a small town located on the shore of Lake Okeechobee in Palm Beach County, Florida. It is considered one of the worst towns in Florida due to its high poverty rate, unemployment rate, and crime rate. The town has limited job opportunities, and most of the available jobs are seasonal, which makes it difficult for locals to find work outside of the harvesting season.

The town's infrastructure is also inadequate, and there are no recreational facilities or entertainment options for citizens to enjoy. The town's population has been declining due to the lack of economic activity, and many people have left the town in search of better opportunities. However, Pahokee has a rich history and culture, and residents are proud of their community.

2. Gainesville

Gainesville, home to the University of Florida, may not be the ideal retirement destination for many. The city has a high crime rate, exceeding the national average, which can be a significant concern for retirees. However, a lot of the crime in Gainesville is concentrated in just a few neighborhoods and the city's crime rate is comparable to other major cities such as Miami and Dallas but 68% higher than Tampa. The hot and humid climate may not be suitable for everyone, and the limited recreational activities for seniors can impact their overall happiness and well-being. Retirees should carefully consider these factors before choosing Gainesville as their retirement home.

3. Pine Hills

Pine Hills is an unincorporated subdivision in Orange County, Florida, west of Orlando, with a population of 66,111 in 2020. The area has a high crime rate, and poverty and unemployment rates are above the national average. However, Pine Hills is home to several parks, schools, and community resources, and revitalization efforts are currently underway. The area is also known for its diverse culture, with many different cultures living in the same vicinity.

4. Miami-Beach

Miami is often considered one of the worst places to live in Florida for families. While the city has a vibrant culture and beautiful beaches, it also has a high cost of living and a high crime rate. The cost of housing in Miami is significantly above the national average, making it difficult for families to find affordable homes. Additionally, the city's crime rate is well above the national average, making safety a concern for parents raising children. Miami also has limited access to quality public schools, which can pose a challenge for families seeking a good education for their children.

5. Daytona Beach

Daytona Beach, known for its racing history and beautiful coastline, may not be the best choice for families. The city has a high crime rate, making it less safe for children. The high unemployment rate can also make it challenging for parents to find stable employment. While the city may be appealing for its beachside atmosphere, families need to carefully consider these drawbacks before making a move.

6. Homestead

Homestead is another city that families should think twice about when considering a move to Florida. Despite its close proximity to Miami, Homestead has a considerably lower cost of living. However, it also has a high crime rate, especially when compared to the national average. The lack of quality public schools and limited recreational activities for families are also concerns. While Homestead can offer some affordability, it may not be worth the sacrifice in safety and education for families looking to settle down.

7. Fort Pierce

Fort Pierce is often cited as one of the worst places to live in Florida for families. The city has a high crime rate that exceeds the national average, raising concerns about safety for families. Fort Pierce also struggles with a weak economy, limited access to quality education, and a lack of recreational activities for children. The city's infrastructure is also inadequate, and there are limited job opportunities outside of the tourism and service sectors. The limited job opportunities can make it difficult for parents to provide for their families, adding to the overall challenges of living in this city.

8. West Palm Beach

West Palm Beach, while offering some attractive features, may not be the best place for families to settle down. The city has a high cost of living which can be challenging for families on a budget. The crime rate in West Palm Beach is also a concern, surpassing the national average. Additionally, the city lacks access to quality public schools and has limited recreational options for families. While West Palm Beach may offer some amenities and cultural attractions, families looking for a safe and affordable place to live may need to look elsewhere.

9. Orlando

Orlando is a city located in Orange County, Florida. The city has a high crime rate, and poverty and unemployment rates are above the national average. The city's infrastructure is also inadequate, and there are limited job opportunities outside of the tourism and service sectors. However, Orlando is a major tourist destination, known for its theme parks, cultural attractions, and business opportunities. The city also has several parks, museums, and community resources, making it an attractive place to live for some people.

10. Ocala

Ocala, located in central Florida, has received mixed reviews as a retirement destination. While the city offers a lower cost of living compared to other parts of the state, it does have some downsides. The hot and humid climate may not be suitable for all retirees, especially those with health concerns. Ocala also has limited recreational activities for seniors. It's important for retirees to carefully assess these factors before considering Ocala as their retirement home.

11. Tallahassee

Tallahassee, the capital of Florida, may not be the best place for retirees. The city has a higher-than-average crime rate, raising concerns about safety and security. The city's infrastructure is also inadequate, and there are limited job opportunities outside of the government sector. The city's hot and humid climate may not be suitable for everyone, and the lack of recreational activities for seniors could impact their quality of life. Retirees looking for a peaceful and safe retirement should carefully consider their options before settling in Tallahassee.

12. Tampa

While Tampa offers beautiful landscapes and a booming job market, it may not be the best fit for retirees. The city has a higher cost of living, which can strain retirement budgets. The traffic congestion and crowded beaches can also be overwhelming for those seeking a more relaxed retirement lifestyle. Tampa also has a higher crime rate compared to the national average, which can be a concern for retirees who prioritize safety. Retirees looking for tranquility and affordability may need to explore other options.

While Florida offers many attractive destinations, there are also places that may not be suitable for families or retirees. Factors such as high crime rates, limited access to quality education and healthcare, a high cost of living, and limited recreational activities can make these cities less desirable for families and retirees. It's crucial to carefully research and assess these factors before making a decision to ensure a happy and fulfilling life in the Sunshine State.

Mortgage Rates Drop This Week: 15-Year FRM Sees Big Dip for Buyers

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Good news for prospective homebuyers! Mortgage rates decreased this week, offering a slight reprieve in what has been a volatile market. According to the latest Primary Mortgage Market Survey® from Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 6.77% as of June 26, 2025, a decrease of 0.04% from the previous week. This dip, while small, could be a welcome sign for many looking to enter the housing market.

The main takeaway here is stability. I think after months of relentless fluctuations, it is a moment of relief for all of us!

Mortgage Rates Drop This Week: 15-Year FRM Sees Big Dip for Buyers

It's crucial to put this week's decrease into context. While it might feel like a big win, the mortgage market has been relatively stable for a couple of months. For me, that stability is key. I'd take consistent rates over wild swings any day!

Here’s a quick snapshot of where things stand:

  • 30-Year FRM: 6.77% (down 0.04% from last week)
  • 15-Year FRM: 5.89% (down 0.07% from last week)

The 15-year FRM saw a more significant drop, decreasing by 0.07% to 5.89%. If you're looking to pay off your mortgage faster and can manage the higher monthly payments, this could be an attractive option. Both rates are still relatively high compared to the lows we saw a few years ago. But looking at the yearly changes, the 30-Year FRM is down -0.09% with the 15-Year FRM being down -0.27%

Key Rate Factors:

Type of Mortgage Rate Weekly Change
30-Year FRM 6.77% -0.04%
15-Year FRM 5.89% -0.07%

What's Driving These Changes?

Several factors influence mortgage rates, and understanding these can help you make informed decisions.

  • Economic Data: Inflation reports, employment figures, and GDP growth all play a role. Strong economic data typically pushes rates up, while weaker data can lead to decreases.
  • Federal Reserve Policy: The Fed's monetary policy, especially its stance on interest rates, has a direct impact on mortgage rates.
  • Housing Market Conditions: Inventory levels, home sales, and price trends affect the overall demand for mortgages.

In this case, the current decrease could be attributed to a combination of factors, including slightly tempered inflation expectations and a desire to stimulate the housing market.

The Housing Market: A Mixed Bag

The housing market presents a bit of a mixed picture right now. While mortgage rates saw a slight decrease , other factors are in motion:

  • Existing-Home Sales: Increased by 0.8% month-over-month, reaching a seasonally adjusted annual rate of 4.03 million in May.
  • Unsold Inventory: Rose by 6.2%, with 1.54 million units available, equivalent to a 4.6-month supply.
  • Median Existing-Home Sales Price: Increased by 1.3% year-over-year to $422,800.

What does this mean? Well, the increase in inventory is fantastic news for buyers, as it means more choices and potentially less competition. The slight increase in sales suggests there’s still demand in the market, but buyers are being more selective. I believe this environment offers opportunities for negotiation, especially on properties that have been on the market for a while. And an increase in inventory, I think, allows buyers negotiating power and they are not squeezed.

Expert Predictions: What's Next for Mortgage Rates?

Predicting the future of mortgage rates is always challenging, but here’s what the experts are saying:

  • Fannie Mae: Expects mortgage rates to end 2025 at 6.5% and 2026 at 6.1%.
  • Mortgage Bankers Association (MBA): Projects rates to remain near 6.8% through September 2025, then settle in the mid-6% range (6.4%-6.6%) by the end of 2025, holding steady around 6.3% into 2026.

These forecasts suggest a gradual decline in mortgage rates over the next year, but it's important to remember that these are just predictions. Economic conditions can change rapidly, so it is better to stay informed and be prepared to adjust your plans.

How This Affects You: Strategies for Homebuyers and Homeowners

So, what should you do with this information? Whether you're a first-time homebuyer or a current homeowner, here are some strategies to consider:

  • For First-Time Homebuyers:
    • Shop Around: Don't settle for the first mortgage rate you're offered. Get quotes from multiple lenders to ensure you're getting the best deal.
    • Improve Your Credit Score: A higher credit score can qualify you for lower interest rates.
    • Save for a Larger Down Payment: A larger down payment reduces the amount you need to borrow, potentially leading to lower monthly payments.
    • Consider an Adjustable-Rate Mortgage (ARM): If you plan to move in a few years, an ARM could offer a lower initial interest rate. But be aware of the risks associated with future rate adjustments.
    • Take Advantage of Increased Inventory: Don't rush into a purchase. Take your time to find the right property at the right price.
  • For Current Homeowners:
    • Refinance: If current rates are significantly lower than your existing mortgage rate, consider refinancing to save money on your monthly payments. Evaluate the costs associated with refinancing to determine if it makes financial sense.
    • Consider a Cash-Out Refinance: If you have equity in your home, a cash-out refinance can provide funds for home improvements or other expenses. Be sure to compare rates and fees from multiple lenders to get the best deal.
    • Pay Down Your Mortgage Faster: Even small extra payments can significantly reduce the amount of interest you pay over the life of the loan.

I always advise people to shop around. Never settle for the first offer. Your financial future is too important to leave to chance!

The Broader Economic Context: A Crucial Consideration

It's essential to understand the broader economic context when making mortgage decisions. Factors like economic growth, inflation, and unemployment can all impact interest rates and the housing market. For example, if inflation remains elevated, the Federal Reserve may continue to raise interest rates, which could push mortgage rates higher.

Is Now a Good Time to Buy?

Ah, the million-dollar question! The honest answer is, it depends. It depends on your individual circumstances, financial situation, and comfort level with the current market.

If you've been waiting for rates to drop significantly before buying, you might be waiting a while. But with inventory increasing and rates showing some signs of stabilization, now could be a good time to start looking seriously.

Remember, buying a home is a long-term investment. Don't let short-term market fluctuations dictate your decision entirely.

Final Thoughts and My Opinion

The slight decrease in mortgage rates this week is a welcome sign for the housing market. While it's not a dramatic shift, it does offer some relief to potential homebuyers and homeowners alike.

I think that the key here is to stay informed, be patient, and make decisions that align with your personal financial goals. Don't let fear of missing out (FOMO) drive your choices. Take your time, do your research, and find the right property and mortgage that fits your needs.

Invest Smarter in a High-Rate Environment

With mortgage rates remaining elevated this year, it's more important than ever to focus on cash-flowing investment properties in strong rental markets.

Norada helps investors like you identify turnkey real estate deals that deliver predictable returns—even when borrowing costs are high.

HOT NEW LISTINGS JUST ADDED!

Connect with a Norada investment counselor today (No Obligation):

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Today’s 5-Year Adjustable Rate Mortgage Drops Slightly to 7.54% – June 27, 2025

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Navigating the world of mortgages can feel like trying to decipher a secret code. Among the various options, the 5-Year Adjustable Rate Mortgage (ARM) stands out as a unique choice. According to Zillow, as of today, June 27, 2025, the national average 5-year ARM mortgage rate is at 7.54%. This article will help dive deep into the 5-year ARM, its implications, and whether it's the right fit for your financial journey. Let's get started!

Today's 5-Year Adjustable Rate Mortgage Drops Slightly to 7.54% – June 27, 2025

Understanding the 5-Year Adjustable Rate Mortgage (ARM)

An Adjustable Rate Mortgage isn't as scary as it sounds. Essentially, it's a home loan with an interest rate that's fixed for a specific period (in this case, five years) and then adjusts periodically based on market conditions. This is different from a fixed-rate mortgage, where the interest rate remains the same throughout the life of the loan.

How does it work?

The 5-year ARM has two distinct phases:

  • Initial Fixed-Rate Period: For the first five years, your interest rate remains constant. This provides predictability in your monthly mortgage payments during this period.
  • Adjustment Period: After the initial five years, the interest rate adjusts at predetermined intervals (usually annually) based on a benchmark interest rate (like the Prime Rate or the LIBOR, though LIBOR will likely be replaced). The margin (a fixed percentage added to the index) is added to determine the new interest rate.
    • For instance, if the benchmark is 3% and the margin is 2.75%, the adjusted interest will be 5.75%.

The Current Mortgage Rate Environment: June 27, 2025

Before diving deeper into ARMs, let's set the stage with a snapshot of the current mortgage rates on June 27, 2025 (Zillow Data):

Loan Program Rate 1-Week Change APR 1-Week Change
30-Year Fixed Rate 6.74% Down 0.17% 7.20% Down 0.17%
15-Year Fixed Rate 5.74% Down 0.22% 6.04% Down 0.22%
5-Year ARM 7.54% Up 0.34% 7.96% Up 0.17%

It's evident that while fixed-rate mortgages might be trending slightly down, the 5-year ARM has seen a slight increase in the past week. It is extremely important to note the rate, APR and week's change for various mortgage products before making an informed decision.

Advantages of Choosing a 5-Year ARM

Okay, so why would anyone choose an ARM over the stability of a fixed-rate mortgage? Here are some compelling reasons:

  • Lower Initial Interest Rate: Historically, ARMs often start with a lower interest rate compared to fixed-rate mortgages. This translates to lower monthly payments during the initial fixed-rate period.
  • Ideal for Short-Term Homeowners: If you plan to sell or refinance your home within five years, you can capitalize on the lower rate without experiencing any interest rate adjustments (this is the biggest reason for choosing a 5-year ARM).
  • Potential for Lower Rates During the Adjustment Period: If interest rates fall or remain stable during the adjustment period, your mortgage rate could decrease, leading to even lower monthly payments.
  • Suitable for Those Expecting Income Growth: If you anticipate a significant increase in your income in the future, you might be comfortable with the risk of a potential rate increase because you'll be better equipped to handle larger payments.

The Risks and Downsides of a 5-Year ARM

It's crucial to acknowledge the potential pitfalls associated with 5-year ARMs:

  • Interest Rate Risk: The primary risk is the possibility of your interest rate increasing during the adjustment period. If interest rates rise significantly, your monthly payments could become unaffordable.
  • Rate Caps and Floors: Most ARMs have rate caps, limiting how much the interest rate can increase at each adjustment and over the life of the loan. However, even with caps, substantial increases are possible. Floors limit how low the interest rate can go should the market crash.
  • Complexity: ARMs can be more complex to understand than fixed-rate mortgages. You need to consider the index, margin, adjustment frequency, and rate caps and floors.
  • Refinancing Costs: If rates start to rise, you might consider refinancing into a fixed-rate mortgage, but this entails additional costs like appraisal fees, origination fees, and title insurance.
    • “I've seen people gamble on ARMs, hoping rates would stay low, only to be caught off guard when they jumped. It's a risk you have to weigh carefully,” I always advised my clients”.

Who is a 5-Year ARM Right For?

Here's a breakdown of situations where a 5-year ARM might be a smart choice:

  • First-Time Homebuyers with Short-Term Plans: If you're buying your first home as a starter property and plan to upgrade within a few years, a 5-year ARM can offer lower initial payments.
  • Real Estate Investors: Investors who buy, renovate, and flip properties often use ARMs because they typically have a short investment timeline. They are betting on the property value increasing in the short term.
  • Borrowers Expecting Rising Income: As mentioned earlier, if you anticipate a significant increase in income, you may be able to handle potential rate adjustments.
  • Those Comfortable with Risk: If you have a high risk tolerance and believe that interest rates will remain stable or decrease, you might be willing to take a chance on an ARM.

Who Should Avoid a 5-Year ARM?

Conversely, here are scenarios where a 5-year ARM might not be the best option:

  • Risk-Averse Borrowers: If you value stability and predictability in your mortgage payments, a fixed-rate mortgage is a safer bet. An ARM can cause sleepless nights if rates are volatile.
  • Those Planning to Stay in the Home Long-Term: If you plan to live in the home for more than five years, you'll eventually face interest rate adjustments, which could disrupt your budget.
  • Borrowers with Tight Budgets: If you have a limited budget and can barely afford the initial payments, a potential rate increase could push you into financial distress.
  • Those Unfamiliar with Financial Markets: If you don't understand how interest rates work and are uncomfortable with market fluctuations, it's best to steer clear of ARMs.

Key Factors to Consider When Evaluating a 5-Year ARM

Ready to make a decision? Here are the crucial factors to consider:

  • Interest Rate Caps: Understand the initial rate cap, the periodic rate cap (the maximum increase at each adjustment), and the lifetime rate cap (the maximum the interest rate can rise over the life of the loan).
  • The Index and Margin: Know which index the ARM is tied to (e.g., Prime Rate). The margin is the fixed percentage added to the index to determine the interest rate.
  • Recession: How would a global or country-level recession affect your ability to be able to deal with rising mortgage payments?
  • Adjustment Frequency: Determine how often the interest rate will adjust (e.g., annually, semi-annually).
  • Prepayment Penalties: Check if there are any penalties for paying off the mortgage early or refinancing.
  • Your Financial Situation: Assess your income, credit score, debt-to-income ratio, and overall financial stability.
  • Market Conditions: Research current and projected interest rate trends. Consult with a financial advisor to get expert opinions. However, remember that no one has a crystal ball.

Comparing 5-Year ARMs with Other Mortgage Options

Let's briefly compare the 5-year ARM with other popular mortgage types:

Mortgage Type Interest Rate Payment Stability Best For
5-Year ARM Lower Initial Variable Short-term homeowners, investors, risk-takers
30-Year Fixed Rate Higher Stable Long-term homeowners, risk-averse individuals
15-Year Fixed Rate Moderate Stable Those wanting to pay off their mortgage quickly

Final Thoughts: Is the 5-Year ARM Right for You?

On June 27, 2025, the 5-year ARM presents both opportunities and risks. The rate of 7.54% might be attractive if you're looking for lower initial payments, but it's important to weigh this against the potential for future rate increases.

Ultimately, the decision of whether to choose a 5-year ARM depends on your individual circumstances, financial goals, and risk tolerance. Consider your options carefully, do your research, consult with a mortgage professional (or several!), and make the choice that's best for you. After all, your home is one of the biggest investments for your life, so take calculated risks!

Capitalize on ARM Rates Before They Rise Even Higher

With fluctuating adjustable-rate mortgages (ARMs), savvy investors are exploring flexible financing options to maximize returns.

Norada offers a curated selection of ready-to-rent properties in top markets, helping you capitalize on current mortgage trends and build long-term wealth.

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Connect with an investment counselor today (No Obligation):

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U.S. States With Lowest and Highest Mortgage Rates Today – June 27, 2025

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Looking to buy a home and snag the best deal on a mortgage? On June 27, 2025, the states with the cheapest 30-year new purchase mortgage rates are New York, Colorado, California, New Jersey, Washington, D.C., Connecticut, Massachusetts, Pennsylvania, and Washington, where average rates hover between 6.61% and 6.71%.

On the flip side, the most expensive states for mortgages are West Virginia, Alaska, Iowa, North Dakota, and Nebraska, with rates ranging from 6.84% to 6.92%. Now, let's dive into what's shaping these numbers and how you can navigate this complex mortgage world.

States With Lowest and Highest Mortgage Rates Today – June 27, 2025

Why Do Mortgage Rates Vary So Much by State?

It's a question that pops up every time you start crunching numbers: why isn't there one single mortgage rate for the entire country? Well, the truth is, a lot of factors come into play at the state level.

  • Different Lenders, Different Territories: Not all lenders operate everywhere. Some focus on specific regions, which means less competition (or more) depending on where you're looking.
  • Credit Score Differences: States have different average credit scores. Places where folks tend to have lower credit will naturally see higher rates.
  • Loan Size Matters: The average loan size varies by state, too. In pricier markets (think California or New York), bigger loans might influence the rates offered.
  • State-Level Regulations: Each state has its own set of rules for the mortgage industry. Some regulations might add costs or complexities for lenders, which they pass on in the form of slightly higher rates.
  • Risk Management Strategies: Lenders have their own ways of assessing and managing risk. One lender might view a particular market as riskier than another, and their rates will reflect that.

Think of it like buying gas. Prices fluctuate from state to state, and even from one gas station to another, due to location, taxes, competition, and operational costs. It's the same with mortgages!

The Lowest and Highest State Mortgage Rates: A Closer Look

Here’s a snapshot of the states with the lowest and highest 30-year new purchase mortgage rates as of today, according to Investopedia's analysis and Zillow's data:

States with the Lowest Mortgage Rates:

  • New York: 6.61%
  • Colorado: 6.63%
  • California: 6.65%
  • New Jersey: 6.67%
  • Washington, D.C.: 6.68%
  • Connecticut: 6.68%
  • Massachusetts: 6.69%
  • Pennsylvania: 6.70%
  • Washington: 6.71%

States with the Highest Mortgage Rates:

  • West Virginia: 6.84%
  • Alaska: 6.87%
  • Iowa: 6.89%
  • North Dakota: 6.90%
  • Nebraska: 6.92%
  • Kansas: 6.92%
  • New Mexico: 6.92%

It’s important to remember these are averages. Your personal rate could be higher or lower depending on your financial situation.

Don't Fall for Teaser Rates: What to Watch Out For

We've all seen those super-low mortgage rates advertised online. They're tempting, but often they're “teaser rates.” What does that mean? Here's a breakdown:

  • Paying Points: To get that rock-bottom rate, you might have to pay “points” upfront (a point is 1% of the loan amount). That's extra cash out of your pocket.
  • Perfect Borrower: Those best rates are usually reserved for borrowers with near-perfect credit scores. If your credit is good but not stellar, expect a higher rate.
  • Smaller Loans: Sometimes, the lowest rates are offered on smaller-than-average loans. If you're buying a more expensive home, that teaser rate might not apply.
  • Hidden Fees and Costs: Be sure to carefully review any mortgage offer to truly understand your costs, so there are no surprises down the road.

National Mortgage Rate Trends: Where Are We Headed?

Over the past few months, we've seen some ups and downs in national mortgage rates. Let’s break down the trends:

  • Recent Dip: Rates on 30-year new purchase mortgages have recently decreased, bringing the national average down to 6.75%. This is the lowest we’ve seen since April 2025.
  • Mid-May Peak: Back in May, the 30-year rate hit a one-year high of 7.15%, so things are looking better now than they did just a few weeks ago.
  • 2025 Low: In March 2025, we saw rates dip to 6.50%. While we're not quite there yet, the recent drop is encouraging.
  • Long-Term Perspective: If we go back to September of last year, 30-year rates were actually at a two-year low of 5.89%. This underscores how much rates can fluctuate.

National Averages by Loan Type

Here's a quick look at the national average rates for different types of mortgages from Zillow:

Loan Type New Purchase Rate
30-Year Fixed 6.75%
FHA 30-Year Fixed 7.55%
15-Year Fixed 5.74%
Jumbo 30-Year Fixed 6.77%
5/6 ARM 7.25%

Estimate Your Monthly Mortgage Payment

The biggest question on every homebuyer's mind is what their monthly mortgage payment will be. It's not just about the interest rate; several factors contribute to that final number.

  • Home Price: Obviously, a more expensive home means a bigger mortgage and higher payments.
  • Down Payment: The more you put down, the less you borrow, lowering your monthly bills.
  • Loan Term: A 30-year mortgage will have lower monthly payments than a 15-year mortgage, but you'll pay more interest over the long haul.
  • Property Taxes: These vary from state to state and even city to city and can significantly impact your mortgage payment.
  • Homeowners Insurance: Protects your home and is a required part of most mortgage agreements.
  • Interest Rate: As we've discussed, this is crucial and depends on your credit score, the type of loan, and the lender.

What Makes Mortgage Rates Go Up or Down?

Trying to predict mortgage rates is a bit like trying to predict the weather – experts can offer educated guesses, but it’s not an exact science. Here are the main factors I keep an eye on:

  • Bond Market: Stay informed on the 10-year Treasury yield.
  • Federal Reserve (The Fed): It determines the nation's monetary policy.
  • Competition: The mortgage market is competitive, and rate variances will arise.

The Fed's Role: A Quick History Lesson

The Federal Reserve's actions have a big impact on mortgage rates. Over the past few years, we've seen the Fed take different approaches:

  • Pandemic Response: In 2021, to combat the pandemic, the Fed bought billions in bonds, pushing mortgage rates down.
  • Fighting Inflation: Starting in late 2021, the Fed began reducing its bond purchases. Then, in 2022 and 2023, it aggressively raised the federal funds rate, leading to a sharp increase in mortgage rates.
  • Rate Cuts: In late 2024, the Fed began cutting rates, which helped bring mortgage rates down a bit.
  • Pausing Rate Cuts: As of today, June 27, 2025, the Fed is holding rates steady, and we might not see another rate cut for a while.

Final Thoughts & Recommendations

Navigating the world of mortgage rates can feel overwhelming. Always compare rates from multiple lenders and don’t be afraid to negotiate. A good mortgage broker can be an invaluable asset during this process. Stay informed, be patient, and don't rush into anything you're not comfortable with.

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California Housing Market Faces Major Downturn Amid Economic Concerns

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Is the California dream fading? It's a question I ponder often, especially when looking at the complexities of our housing market. The California housing market continues to face headwinds in 2025, experiencing a slowdown marked by declining sales and prices in May. This dip is driven by continued economic uncertainty, lingering tariff wars, and persistently high mortgage rates, undermining buyer confidence and demand. Let's dig into why this is happening and what it means for you, whether you're a potential buyer, a current homeowner, or just curious about the Golden State's real estate scene.

California Housing Market Faces Major Downturn Amid Economic Concerns

A Rollercoaster Ride: Where Are Home Sales and Prices Heading?

Imagine you're on a rollercoaster – that's California's housing market right now. We've seen some exhilarating climbs, but lately, it feels like we're on a downward slope. The California Association of Realtors (C.A.R.) reported that in May 2025, existing single-family home sales totaled 254,190 on a seasonally adjusted annualized rate. That's down 5.1 percent from April and 4.0 percent from May 2024.

Here is the summary:

  • Home Sales: Down 5.1% from April, 4.0% from May 2024.
  • Median Home Price: $900,170, down 1.1% from April, 0.9% from May 2024.
  • Year-to-Date Sales: Up only 0.3% statewide.

Statewide, the median home price in May was $900,170, reflecting a 1.1 percent decrease from April and a 0.9 percent decrease from May of the previous year. Although modest, it signals a shift in market dynamics.

Why is this happening?

From my perspective, it's a combination of factors. The initial surge in demand following the pandemic has cooled down, and the reality of higher borrowing costs is setting in. People are hesitant. Will they be able to afford the monthly payments, especially when factoring in other expenses? And the uncertainty around the overall economy doesn't help.

Interest Rates: The Elephant in the Room

Let's talk about interest rates. They play a huge role in housing affordability, and they've been anything but stable lately. While the 30-year fixed-mortgage interest rate averaged 6.82 percent in May, down from 7.06 percent in May 2024, persistent economic uncertainties are keeping these rates elevated, hindering the momentum in the California Housing market. Imagine trying to buy a house and having your budget constantly squeezed by fluctuating interest rates – it’s incredibly frustrating!

Inventory: A Mixed Bag

Inventory, or the number of homes available for sale, is another piece of the puzzle. Total active listings in May rose on a year-over-year basis by nearly 50 percent. This is a pretty significant jump, and it suggests that we're moving away from the extreme seller's market we've seen in recent years. This increase gives buyers more options, but it also means sellers might need to be more flexible on price.

The Unsold Inventory Index (UII), which measures how many months it would take to sell all the homes on the market at the current sales rate, was 3.8 months in May, up from 3.5 months in April and 2.6 months in May 2024. A higher UII means it's taking longer to sell homes, giving buyers more leverage.

Check out this table summarizing inventory trends:

Metric May 2025 April 2025 May 2024
Unsold Inventory Index (UII) 3.8 3.5 2.6
Active Listings Up ~50% N/A N/A

Regional Differences: It's Not Just One California

California is a big state, and the housing market varies significantly from region to region.

Let's break down the regional performance:

  • Central Coast: Experienced the largest sales drop from last year, down 8.4 percent. However, it saw the highest price increase, up 6.2%. It is primarily due to a number of factors in cluding insurance availability or affordability.
  • San Francisco Bay Area: Sales fell 8.2 percent, and prices declined 3.8 percent.
  • Southern California: Sales decreased 7.6 percent, but prices rose slightly by 0.9 percent.
  • Central Valley: Sales dipped 5.2 percent, and prices edged up 0.6 percent.
  • Far North: The only region with a slight sales gain of 0.5 percent, but prices fell 3.8 percent.

This shows that while some areas are struggling, others are holding relatively steady. Understanding these regional differences is crucial when making real estate decisions.

Buyer Sentiment: Are People Still Optimistic?

Despite the challenges, there's a glimmer of optimism among potential homebuyers. C.A.R. reported that consumers who believed “now is a good time to buy” climbed to 26 percent in May, the highest level since February 2022. This suggests that some buyers are seeing opportunities in the current market, perhaps hoping to snag a deal as prices moderate and inventory increases.

Why the optimism?

I think it's because people recognize that the market can't stay red-hot forever. The thought is that if prices stabilize or even dip slightly, and inventory improves, it could be a good time to buy before interest rates potentially rise again. The old adage, “Buy when others are fearful” comes into play.

Looking Ahead: What Can We Expect?

Predicting the future is always tricky, but here are a few thoughts based on the current trends:

  1. Price Moderation: I expect home prices will continue to moderate, especially as we move into the second half of the year. Seasonality will play a role, with prices typically cooling off during the fall and winter months.
  2. Inventory Growth: As new listings continue to come onto the market, buyers will have more choices. However, the pace of inventory growth may slow down in the coming months.
  3. Interest Rate Sensitivity: The market will remain highly sensitive to changes in interest rates. Any significant increase could further dampen demand, while a decrease could provide a boost.
  4. Regional Variations: The performance of the housing market will continue to vary across different regions of California. Some areas will likely see greater price declines than others.

What does it all mean for you?

If you're a buyer, this could be a good time to get into the market. You'll have more options, less competition, and potentially more room to negotiate on price. Just be sure to do your homework, get pre-approved for a mortgage, and work with a knowledgeable real estate agent.

If you're a seller, you might need to adjust your expectations. It's no longer a guaranteed quick sale at top dollar. Be prepared to price your home competitively and consider making some upgrades to attract buyers.

Here's the truth: It may be a good time to seek the help of a real-estate professional who knows the intricacies of the local real estate market.

Final Thoughts: The California housing market continues to face headwinds, but it's important to remember that real estate is a long-term investment. The market will eventually rebound, and California will remain a desirable place to live.

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