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Will the Texas Housing Market Crash as Prices Drop Across the State?

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It wasn't that long ago that the Texas housing market felt unstoppable. Homes were selling in bidding wars, often in days, and prices seemed to climb forever. For anyone trying to buy, it was a frustrating, expensive time. But times change, and the latest data points suggest a significant shift is underway. Indeed, the Texas housing market enters a major correction phase as prices drop across the state, driven by a dramatic increase in the number of homes for sale.

I've been watching real estate markets for years, and what we're seeing in Texas right now is a clear signal that the wild boom times are over, at least for now. Let's dive into what the numbers are telling us and what it means if you're a buyer, a seller, or just curious about the Lone Star State's real estate future.

Will the Texas Housing Market Crash as Prices Drop Across the State?

The Unmistakable Sign: Skyrocketing Inventory

The first and perhaps most obvious sign of a changing market is the sheer number of homes sitting on the market. Think of it like this: when there are way more items on the store shelves than people wanting to buy them, the store eventually has to lower prices to move the goods. The same principle applies to housing.

According to data highlighted by real estate analyst Nick Gerli, the CEO of Reventure App, the number of active listings for sale across Texas has shot up dramatically. Looking at the historical data, the state's inventory levels were relatively stable before the pandemic madness.

  • In 2017, active listings were around 89,193.
  • They hovered in the 88,000s and 90,000s through 2018, 2019, and 2020.
  • The average during this pre-pandemic period was roughly 80,128 listings.
Is Texas Housing Crashing? Data Shows 53% Inventory Jump, Prices Falling
Source: Reventure App via X

Then came the pandemic boom. Fueled by low interest rates, remote work, and a rush of migration, demand exploded while supply tightened. Builders couldn't keep up, and homeowners with incredibly low mortgage rates weren't selling. This caused inventory to absolutely plummet to historic lows.

  • In 2021, listings dropped to a stunning low of around 35,997.
  • 2022 wasn't much better, staying incredibly tight at about 34,932.

These incredibly low numbers are a huge reason prices jumped so much. There just weren't enough houses for everyone who wanted one.

But the tide has turned. As interest rates climbed and the initial rush of pandemic buyers slowed, more homes started coming onto the market, and fewer buyers were able to jump in.

  • Inventory started climbing in 2023 to around 68,817.
  • It continued its ascent in 2024, hitting about 95,156.
  • And now, the data point that really catches my eye: in April 2025, active listings hit a whopping 123,237.

Let that sink in. 123,237 active listings. Compared to the roughly 80,128 average from 2017-2020, that's about a 53% increase in the number of homes available for sale. Compared to the pandemic lows of 2021-2022, it's literally more than triple the inventory.

From my perspective as someone who follows these markets, such a rapid and significant rise in inventory is a screaming signal. It tells me that the intense competition among buyers has faded. Sellers are finding their homes are sitting on the market longer, and they're facing much more competition from other homes for sale. This shifts the power dynamic firmly towards buyers.

Prices Are Following Suit: It's Not Just Inventory

High inventory is important because it's a leading indicator, but the real impact people feel is on prices. And Nick Gerli's analysis confirms what we'd expect: prices are now dropping across the state.

This isn't just a prediction based on inventory; it's a report on what's actually happening. We're seeing more price cuts, longer days on market before a home sells (if it sells), and ultimately, sale prices coming down from their peaks.

Why is this happening now? It's a mix of factors all coming together:

  1. The Inventory Surge: As discussed, more choices mean buyers don't have to overpay or waive contingencies like they did before.
  2. Higher Interest Rates: This is a massive factor. Even if a house price is slightly lower, the monthly payment on a mortgage is significantly higher now than it was a couple of years ago because interest rates have risen. This directly impacts how much house people can afford, reducing the pool of eligible buyers.
  3. Slowing Migration: The influx of new residents, particularly from more expensive states like California, was a major driver of demand and price growth in Texas during the boom. Nick Gerli notes that domestic migration into Texas slowed significantly in 2024, down 62%. While Texas is still growing, the pace of migration that fueled the recent frantic buying has cooled considerably. Fewer people arriving with potentially higher budgets means less competition for local buyers.

When you combine a flood of supply with cooling demand (due to affordability issues and slower migration), the result is predictable: prices have to come down to find the market clearing level.

How Much Could Prices Drop in Texas? Looking Ahead

This is the question on everyone's mind: just how far could this correction go? Predicting the exact bottom is impossible, but the data gives us some strong hints and potential scenarios.

One way to look at it is comparing current prices to long-term historical norms relative to incomes or rents. Nick Gerli's analysis suggests that Texas home values are still about 17.7% overvalued today compared to that historical relationship. This means, even with some recent small drops, prices haven't yet fully adjusted back to where they “should” be based on underlying economic fundamentals over the long run. He notes this overvaluation has improved a bit recently (meaning prices got even more overvalued at the peak), but it's still significant.

Based on current supply/demand conditions like the skyrocketing inventory, increased price cuts, and longer days on market, Reventure's short-term forecast (over the next 12 months) is for home prices in Texas to drop by -4.0% statewide. This seems like a reasonable near-term prediction given the clear shift in market dynamics we're witnessing.

However, Nick Gerli also talks about the potential for a larger correction, perhaps in the range of 15-20%. This more significant drop is a possibility, especially if certain economic conditions worsen. A key risk factor he points out is the oil industry. Texas's economy, while diverse, still has significant ties to energy. He mentions oil prices around $57/barrel as being problematic, potentially causing local operators to shut down production. A recession in the oil sector could lead to job losses and reduced economic activity in parts of Texas, further weakening housing demand and potentially accelerating price declines.

My own thoughts align with this analysis. Markets rarely correct in a perfectly smooth line. The 4% drop over the next year might be the initial phase, especially if economic conditions remain stable. But if there's an external shock, like a downturn in a key industry or a broader recession, the correction could easily deepen into that 15-20% range. The underlying overvaluation suggests there's still room for prices to fall before they hit historical norms.

The Silver Lining: A Step Towards Affordability

While headlines about price drops can sound alarming, it's important to remember why this correction is happening. The previous run-up in prices made Texas, a state long known for its relative affordability, increasingly out of reach for many of its residents. This was particularly true for first-time buyers or those earning local wages who weren't benefiting from the high salaries of coastal transplants.

Prices declining is actually a necessary step towards restoring some balance and improving affordability. As prices come down, more local Texans will be able to consider buying a home again. This can bring buyers back into the market, which in turn helps stabilize things eventually.

Even after a potential 4% drop, Nick Gerli's analysis suggests the market might still be about 10-12% overvalued. This indicates that the path to full affordability, based on historical metrics, might require further price adjustments down the line.

Understanding Reventure's Forecast Score

Reventure App uses a forecast score (0 to 100) to predict 12-month price movements based on supply and demand fundamentals. Texas currently has a score of 37/100. Scores closer to 0 indicate a market where prices are expected to decline, while scores closer to 100 suggest prices are likely to rise. A score of 37 is on the lower end, reinforcing the expectation of falling prices in the near future compared to other markets in the U.S. It signals weak fundamentals for price appreciation right now.

My Take on What This Means

Based on the data, the trends, and my understanding of how markets work, here's my personal view:

  • For Sellers: The party is over. Listing your home now means entering a market with much more competition. You'll likely need to price competitively, be prepared for negotiation, and accept that your home might take longer to sell than it would have a year or two ago. Overpricing is the quickest way to have your listing sit and eventually require larger price cuts.
  • For Buyers: This is potentially good news. You have more options, less pressure to make rushed decisions, and more leverage to negotiate on price and terms. However, higher interest rates still make the monthly cost of buying high, even if the price comes down. Don't just look at the list price; look at the full monthly payment with the current rates. Do your homework on local market conditions – while the state average is dropping, some specific neighborhoods might hold up better than others initially.
  • For Texas: A housing market correction, while painful for those who bought at the peak, is ultimately healthy if it improves affordability. Making it easier for residents who work in the state to afford homes is crucial for long-term economic stability and quality of life.

The dramatic increase in inventory, coupled with clear signs of prices dropping and underlying overvaluation, strongly indicates that the Texas housing market is undergoing a significant correction. It's a necessary adjustment after a period of unsustainable growth. While the exact magnitude and duration of the downturn remain to be seen and could be influenced by broader economic factors like the energy sector, the direction is clear: the Texas housing market is cooling down, and prices are finding a new level.

Work With Norada in Texas's Shifting Market

As Texas enters a housing correction phase, savvy investors are capitalizing on price adjustments and increased inventory across key markets.

Norada offers a curated selection of turnkey rental properties in resilient Texas cities, providing consistent income and long-term appreciation potential.

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Texas Housing Market: Trends and Forecast 2025-2026

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The Texas housing market is currently showing signs of shifting towards a buyer's market with increasing inventory, price cuts, and more negotiation power, even as affordability remains a challenge. The pressure of rising inventory is beginning to weigh more heavily on the market, despite affordability challenges. The current market exhibits signs of an unsustainable inventory, with sellers increasingly cutting prices to attract buyers.

However, record-high inventory levels are offering buyers far more choice and negotiation leverage than they've had in recent years. Right now, it feels like we're at a turning point. Gone are the days of bidding wars and sky-high prices. Instead, buyers are gaining the upper hand as sellers adjust to a new reality. Let’s dive into the details of what I'm seeing happening in Texas and what I think it means for you, whether you're buying, selling, or just curious.

What's Happening in the Texas Housing Market in 2025?

Let's break down the numbers and see what they tell us.

Key Metrics to Watch (May 2025 vs. May 2024):

  • Home Sales: According to the latest report from the Texas Real Estate Research Center,  home sales in Texas increased by a tiny 0.1% year-over-year. This minimal change suggests the market is stabilizing to some degree.
  • Home Price Index: Held steady at 0.0% year-over-year. Prices have been steadily climbing for years, and the idea that they are pausing is something of a shock to the prevailing market thinking.
  • Active Inventory: Soared by 29.8% year-over-year. This is a big number that points to a clear shift in the balance of power.
  • Single-Family Permits: Decreased by 8.0% year-to-date. This shows that builders are responding to the changing market conditions by slowing down new construction.

Let's Talk Numbers: A Deeper Dive

To truly understand where we are, it’s crucial to look at the actual figures and compare them to previous years. Here’s a table that summarizes some of the key data:

Metric May 2025 May 2024 Change (Year-over-Year)
Closed Sales (TX) 33,417 33,394 +0.1%
Median Sale Price (TX) $340,000 $345,000 -1.4%
Month's Supply 5.5 4.3 +27.9%
Days on Market 32 26 +23.1%
Seller Price Cuts (Median) $11,500 $9,900 +16.2%

What Does This Mean for Buyers and Sellers?

For Buyers:

More Choices: With increased inventory, you'll have more homes to choose from, increasing the possibility of finding a home to your taste. No more settling for something that's “good enough.” Negotiating Power: Sellers are now more willing to negotiate on price and concessions. This is a big advantage for buyers. Patience is Key: Don't rush into a purchase. Take your time to find the right home and negotiate the best deal, as conditions are improving.

For Sellers:

Realistic Expectations: It's crucial to set realistic expectations about pricing. The days of overpricing and expecting bidding wars are over. Highlight Your Home's Best Features: Make sure your home is in top condition and present it in the best possible light. Remember, buyers have more options now. Consider Incentives: Be prepared to offer incentives, such as paying for closing costs or including appliances, to attract buyers.

Breaking Down the Market Trends

Here are some of the key trends I'm observing in the Texas housing market:

  • Rising Inventory: Inventory levels have been steadily climbing, giving buyers more options and reducing competition. As of May 2025, the inventory is at 5.5 months’ supply, up from a mere 4.3 months last year. To put it in perspective, an earlier inventory to this level was recorded in Septemeber 2012.
  • Price Cuts: With inventory on the rise, sellers are increasingly cutting prices to attract buyers. In May, 65.7% of closed sales included price cuts of $5,000 or more, with a median reduction of $11,500.
  • Days on Market Increasing: Homes are taking longer to sell, giving buyers more time to consider their options. The median days on market in May reached 32 days, an increase of 23.1% from the previous year.
  • New Listings Outpacing Sales: A surge in new listings is further contributing to the inventory buildup, increasing the ratio of new listings to pending sales. In May, 61,366 new listings entered the market, a rise of 1.8% MoM and 12.5% YoY.
  • Mortgage Rates Impacting Affordability: Persistently high mortgage rates continue to be a hurdle for potential homebuyers. While job numbers remain strong across the state, most buyers are struggling to find affordable home options.

Regional Differences: Not All Texas Markets are Created Equal

It's important to remember that Texas is a big state, and different regions are experiencing the housing market shift in different ways.

  • Austin: Austin's housing market has seen some of the most significant price declines, having an appreciation rate of negative 3.0% YoY in May 2025. Prices are now 17.4% below the market peak set in May 2022.
  • Dallas-Fort Worth: Inventory pressure in Dallas has pushed prices lower for three consecutive months.
  • Houston: Houston's housing market is the strongest in Texas. Despite similar inventory buildup and pricing pressure, Houston’s home prices continue to rise YoY at a modest pace. In May, the average price reduction was $12,000.
  • San Antonio: Prices in San Antonio experienced a slight decline of 0.4% YoY in May, following a steeper drop in April. The typical seller price cut reached $15,100 with a median sale price of $310,000.

Let's look at the regional differences in the form of data:

Region HPI Year-over-year % Change May 2025
Austin -3.0%
Dallas-Fort Worth -1.4%
Houston 2.0%
San Antonio -0.4%
Texas Overall 0.0%

My Thoughts on the Texas Housing Market: Experience and Insights

From where I stand, the shift towards a buyer’s market is a welcome change. For years, buyers have faced enormous pressure, often overpaying for homes and waiving important contingencies. This new environment allows for more negotiation and provides buyers with the chance to find homes that truly fit their needs and budgets.

However, I also know that this transition can be unsettling for sellers. It requires a shift in mindset. Sellers need to be more realistic about pricing, be prepared to negotiate, and invest in presenting their homes in the best possible light.

The Role of Interest Rates

One of the biggest factors influencing the housing market is, of course, interest rates. Persistently high mortgage rates are impacting buyer affordability and keeping some potential homebuyers on the sidelines. While it's hard to predict exactly what will happen with rates, even small drops can significantly impact the market.

Keep an eye on inflation data and Federal Reserve announcements. These will provide you with crucial clues about the future direction of interest rates.

Texas Housing Market Forecast 2025-2026

Looking ahead to the rest of 2025, things are likely to be more of the same. I anticipate continued price declines as the market adjusts to elevated inventory levels and affordability challenges. However, this doesn’t mean the sky is falling. As prices become more attractive, we may see buyers who have been waiting on the sidelines jump back into the market, creating a better balance.

The peak spring buying season has passed and that would push prices down further, and may attract more buyers. Looking at the labor data showing inflationary pressure, mortgage rates are forecast to remain stable.

Here’s what I expect:

Inventory to Remain High: I believe that inventory levels will remain elevated, giving buyers more choices, at least for the remainder of 2025.

Prices to Continue to Soften: With current conditions, it is likely that prices will continue to soften, particularly in markets like Austin and Dallas-Fort Worth.

Increased Seller Incentives: It will be essential for sellers to be willing to offer incentives to attract buyers.

Interest Rates to Remain a Key Factor: Interest rates will continue to play a vital role in determining affordability and buyer demand.

Final Thoughts – Is Now a Good Time to Buy or Sell in Texas?

Navigating the Texas housing market requires a careful approach and expert advice. Understanding the trends and forecasts, as well as working with knowledgeable real estate professionals, can help you make informed decisions.

  • If you're a buyer: You're in a much better position and have greater possibilities in selection.
  • If you're a seller: Be realistic about your chances and take your time to make a decision.

In my experience, the best time to buy or sell depends on your individual circumstances and goals. So do your homework, seek professional advice, and make the best decision for you and your family.

Thinking of Real Estate Investment in Texas?

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Mortgage Rates Today: The States Offering Lowest Rates – July 24, 2025

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The states offering the lowest 30-year new purchase mortgage rates are New York, Washington, New Jersey, North Carolina, California, Michigan, Virginia, Arizona, and Oregon, with averages ranging from 6.66% to 6.83%. Keep reading to learn more about what's impacting these rates, and how to find the best deal for you.

Today’s Mortgage Rates: The States Offering Lowest Rates

Why Mortgage Rates Matter (More Than You Think)

Let's be real, mortgage rates aren't the most exciting topic. But, they dramatically impact how much you'll pay for your home over the years. A small change in the rate can lead to thousands of dollars in savings or extra costs. Understanding these rates is crucial whether you're a first-time homebuyer or looking to refinance.

State-by-State Breakdown of Mortgage Rates

Mortgage rates aren't the same across the country. Several factors contribute to these differences, including the lenders that operate in a particular state, state-level regulations, and average loan sizes and credit scores in these states.

According to Investopedia's report and Zillow's data, here's a quick view of the states with the highest and lowest rates as of Wednesday:

  • States with the Lowest 30-Year New Purchase Mortgage Rates:
    • New York: 6.66%
    • Washington: 6.70%
    • New Jersey: 6.73%
    • North Carolina: 6.76%
    • California: 6.79%
    • Michigan: 6.80%
    • Virginia: 6.81%
    • Arizona: 6.82%
    • Oregon: 6.83%
  • States with the Highest 30-Year New Purchase Mortgage Rates:
    • West Virginia: 6.91%
    • Alaska: 6.93%
    • Washington, D.C.: 6.95%
    • Kansas: 6.96%
    • New Mexico: 6.98%
    • Maryland/Missouri:6.98%

As you can see, there's a difference of over 0.3% between the lowest and highest rates. In the grand scheme of things, that is quite significant.

National Mortgage Rate Trends

While state-level rates are interesting, it's also good to keep an eye on national trends:

  • 30-Year Fixed: 6.86% (up 2 basis points from yesterday)*
  • FHA 30-Year Fixed: 7.55%
  • 15-Year Fixed: 5.87%
  • Jumbo 30-Year Fixed: 6.77%
  • 5/6 ARM: 7.37%

It's important to remember that these are average rates. Your actual rate will vary based on your individual circumstances.

Why Do Mortgage Rates Vary from State to State?

I've always found the variation in mortgage rates across states to be fascinating. It comes down to a few key factors:

  • Lender Presence: Not all lenders operate in every state. That means less competition in some states, which can lead to higher rates.
  • State Regulations: Mortgage regulations vary by state. Some states have stricter rules that can make it more expensive for lenders to operate.
  • Credit Scores and Loan Sizes: States with generally higher average credit scores might see slightly lower rates, as lenders perceive less risk. Similarly, areas with larger average loan sizes may reflect in the rates.
  • Risk Tolerance: Some lenders are simply more willing to take on risk than others, which affects the rates they offer.

The Importance of Shopping Around

Here’s my golden rule for getting a mortgage: always shop around. Don't just go with the first lender you find. Rates can vary widely, so comparing offers is essential.

I know it can be time-consuming, but it's worth the effort. Even a small difference in the interest rate can save you a lot of money over the life of the loan. You might be surprised at how much rates differ from one lender to the next.

I know from my own experience, that shopping for the best rate when buying my first home resulted in over $10,000 in savings over the life of the loan. Don't let that money slip through your fingers.

Factors Influencing Mortgage Rates

Understanding these factors can help you anticipate whether rates are likely to rise or fall:

  • The Bond Market: Mortgage rates often track the yield on 10-year Treasury bonds. If bond yields rise, mortgage rates tend to follow suit.
  • The Federal Reserve: The Fed's monetary policy plays a significant role. Its policies on bond buying and funding government-backed mortgages can influence rates.
  • Competition Among Lenders: The more lenders compete for your business, the better the rates you're likely to get.

The Federal Reserve’s Current Role

The Federal Reserve plays a huge role in setting the tone for mortgage rates. Here’s what’s been happening:

  • Recent Rate Cuts: The Fed cut rates three times from September to December 2024, bringing the federal funds rate down to a target range of 4.25%–4.5%.
  • Future Outlook: The Fed is expected to make two further rate cuts in 2025. When? That's the million-dollar question.
  • Key Influences: Factors like tariffs, inflation, economic slowdown, and even political pressure influence the Fed's decisions.

As mentioned above, because the Fed is projecting cuts to the rates later this year, analysts are projecting the 30-year mortgage rate to progressively reduce. There are hopes of a 5% rate being available by the year 2028.

How to Calculate Your Potential Mortgage Payment

Before you start looking at homes, get an idea of what you can afford. Online mortgage calculators can help you estimate your monthly payments based on factors like:

  • Home price
  • Down payment
  • Loan term
  • Property taxes
  • Homeowners insurance
  • Interest rate

Keep in mind, these are just estimates. Your actual payment could be different.

Factor Example
Home Price $440,000
Down Payment $88,000 (20%)
Loan Term 30 years
Interest Rate (APR) 6.67%
Estimated Monthly Payment $2,649.04

My Advice: Prepare and Be Patient

Getting a mortgage can be a complex process, but with some preparation, you can go in ready. Here are a few tips I've learned along the way:

  • Check Your Credit Score: A good credit score will help you get a better rate.
  • Save for a Down Payment: The more you put down, the less you'll have to borrow.
  • Get Pre-Approved: This will give you a better idea of how much you can afford and make you a more attractive buyer.
  • Shop Around: I can't stress this enough. Get quotes from multiple lenders. There are no obligations to committing just from hearing offers.

Final Thoughts

Today's mortgage rates are constantly changing. While some states offer slightly lower rates than others, the most important thing is to shop around, compare offers, and find the best deal for your specific financial situation. Keep an eye on national trends, and don’t be afraid to ask questions. After-all, this is likely the biggest purchase you have or will make in your life.

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Will Cape Coral Be the Next Florida Housing Market to Crash?

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If you're thinking about buying or selling a home in Cape Coral, Florida, you need to be aware that the Cape Coral housing market is currently facing a high risk of price decline. Recent data from Cotality (formerly CoreLogic) shows that Cape Coral has experienced the largest year-over-year decline in home prices among the top 100 markets, with prices falling by a significant -6.5%. This isn't just a small blip; it signals a real shift, and prices are now back to levels we saw in the spring of 2022. While some parts of the country are still seeing home prices go up, Florida, and specifically Cape Coral, is in a cooling-off period.

Will Cape Coral Be the Next Florida Housing Market to Crash?

What's Driving This Downturn in Cape Coral?

It's easy to look at the numbers and feel a bit uneasy, but understanding why this is happening can give us a clearer picture. For a long time, Florida, and many of its popular cities like Cape Coral, saw incredible home price growth. People flocked there for the sunshine, beaches, and a generally more affordable lifestyle compared to other parts of the country. But as Dr. Selma Hepp, Chief Economist at Cotality, points out, “housing market headwinds continue to challenge homebuying demand.”

Think of it like this: imagine a popular toy that everyone wants. The price goes up because so many people are trying to buy it. But eventually, either fewer people want it, or more of that toy becomes available. In Cape Coral's case, after years of really strong growth, the market is starting to catch its breath.

One of the biggest factors affecting home prices nationwide, and certainly in places like Florida, is affordability. According to Cotality's data, the national median home price is around $395,000, and to afford that, you'd need an income of about $87,800. While these are national figures, they help paint a broader economic picture. When people worry about their finances, job prospects, or even potential tariff impacts, they tend to be more cautious about making big purchases like a home. This caution can lead to less demand, and when demand softens, prices can start to fall.

Florida's Broader Market Trends

Cape Coral isn't alone in seeing its housing market cool down. Florida as a whole reported negative home price growth of -0.8% in April 2025. This means that, on average, homes across the state are not increasing in value, and in many cases, they are losing value.

Dr. Hepp specifically noted that “several markets in the state are seeing price declines.” In fact, Cotality's data identified that all five of the U.S. markets with the highest risk of price decline are located in Florida. This reinforces the idea that the Sunshine State is undergoing a significant market adjustment.

It's interesting to see that Florida's median sales price has dipped below the national median, which is a notable shift. This suggests that the rapid price increases the state experienced previously might have pushed prices beyond what many buyers can comfortably afford, especially when you factor in current economic uncertainties.

Cape Coral's Specific Situation: A Deeper Dive

Let's bring it back to Cape Coral. The data is quite stark: a -6.5% year-over-year decline is a substantial drop. For context, the national year-over-year price growth was only 2.0% in April 2025, with single-family detached homes growing at 2.46%. However, single-family attached homes actually saw a decline of 0.08% nationally – the first annual drop since 2012.

Here's what this means for Cape Coral:

  • Prices are back where they were: The -6.5% decline means that the average home price in Cape Coral is now similar to what it was in the spring of 2022. If you bought a home in late 2022 or early 2023 at the peak of the market, you might be looking at a loss in equity right now.
  • More “Cool” Markets: Cape Coral is listed as the “coolest” housing market in the country in Cotality's April 2025 data, with Punta Gorda, Florida close behind at -6.2%. This “coolness” is a direct indicator of declining prices.

Why is Cape Coral Hit So Hard?

It's worth digging into why Cape Coral might be experiencing a more pronounced downturn than some other areas.

  1. Rapid Appreciation: Cape Coral, like much of Florida, saw very rapid price increases in the years leading up to this current slowdown. Markets that experience such quick growth are often more susceptible to price corrections when conditions change. It’s like a rubber band being stretched too far – it can snap back.
  2. Affordability Concerns: While Florida might have been more affordable than places like California or New York in the past, the surge in prices has made it less so. As incomes haven't kept pace with the soaring home values, more buyers are priced out or become hesitant.
  3. Economic Headwinds: The broader economic concerns mentioned earlier, such as worries about job security and inflation, can hit markets like Cape Coral harder if they are more reliant on certain industries or if they attract a significant number of buyers who are sensitive to economic shifts.
  4. Supply vs. Demand: While the data mentions that “improved for-sale supply is providing buyers with more options,” if demand in a specific market like Cape Coral softens significantly, even a normal supply can feel like too much, leading to price pressure.

What Does This Mean for Buyers and Sellers?

For Sellers:

If you're looking to sell your home in Cape Coral, it's crucial to have realistic expectations.

  • Price Appropriately: Overpricing your home in this market could mean it sits on the market for a long time, potentially leading to price reductions later. Working with a local real estate agent who understands current market conditions is key. They can help you price your home competitively based on recent sales.
  • Be Prepared for Negotiations: Buyers might have more leverage than they did a year or two ago. Be prepared for offers that may be below your asking price and be open to negotiations.
  • Highlight Your Home's Strengths: Focus on what makes your home unique and appealing. Is it beautifully renovated? Does it have a great canal view? Emphasize these features to attract buyers.

For Buyers:

This market shift might present some opportunities for buyers.

  • More Negotiating Power: With prices softening and more homes on the market, you may find it easier to negotiate on price and terms.
  • Wider Selection: You might have a better chance of finding the home that truly fits your needs and budget, rather than feeling rushed into a purchase.
  • Don't Wait Too Long: While prices are declining, there's also a forecast for potential future growth. Waiting indefinitely might mean missing out on current favorable conditions. It’s important to buy when it makes sense for your personal financial situation and long-term goals.

Other Florida Housing Markets to Watch: The “High-Risk” List

Cotality's data highlights a “Markets to Watch” list featuring areas with a “very high risk of price decline.” The fact that Cape Coral tops this list at number 1 is a significant warning sign. Other Florida markets on this list include:

  • Lakeland, FL (2nd)
  • North Port, FL (3rd)
  • St. Petersburg, FL (4th)
  • West Palm Beach, FL (5th)

The accompanying chart showing “High-risk market home price trends” visually illustrates this. For Cape Coral, the purple line representing its home price trend shows a clear peak and subsequent decline, now leveling off but still significantly lower than its high point.

Looking Ahead: What's the Forecast?

The national picture is one of slowing growth, but not necessarily a nationwide crash. Dr. Hepp notes that “annual home price growth has slowed considerably, but home prices this spring have held up, and gains have mostly mirrored trends seen pre-pandemic.” This is somewhat encouraging, suggesting that the current slowdown might be more of a correction after an overheated period rather than a full-blown recession in housing prices across the board.

However, for markets like Cape Coral that experienced very high growth and are now seeing significant declines, the path forward could be different. The factors influencing the national market – economic uncertainty, interest rates, and affordability – will continue to play a role.

The fact that Florida, and specifically Cape Coral, is overrepresented in the markets most at risk suggests that local economic conditions, coupled with the broader national trends, are creating a more challenging environment for home values in this region.

It's my professional opinion, based on this data and my understanding of real estate cycles, that sellers in Cape Coral should prepare for a market where they might not achieve the prices seen at the peak. Buyers, on the other hand, could find more favorable conditions, but should still be diligent in their research and financing.

As Dr. Hepp mentions, “With more visibility around tariffs, diminishing concerns about an economic recession, and more homes for sale, the homebuying market could see some improved optimism and more activity going forward.” This suggests that while there are risks, there are also potential catalysts for improvement. However, for Cape Coral, the immediate outlook remains cautious, with a continued high risk of price decline.

It’s crucial for anyone involved in the Cape Coral real estate market to stay informed and make decisions based on the most current data and local expert advice.

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Mortgage Rates Today July 24, 2025: Rates Drop Across the Board, 30-Year FRM at 6.86%

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Mortgage rates today — July 24, 2025 — show a small decrease in the 30-year fixed mortgage rate, down slightly from last week at 6.86%. Refinance rates also dipped, with the national 30-year fixed refinance rate now at 7.06%. However, 15-year fixed rates and some ARM (Adjustable Rate Mortgage) products saw mixed changes. These movements reflect ongoing economic pressures and Federal Reserve policies that continue to influence borrowing costs.

Mortgage Rates Today July 24, 2025: Rates Drop Across the Board, 30-Year FRM at 6.86%

Key Takeaways

  • 30-year fixed mortgage rates edged down to 6.86%, a slight dip from 6.88% the week before.
  • 15-year fixed mortgage rates rose marginally to 5.90%; 5-year ARM rates decreased to 7.63%.
  • Refinance rates followed a similar pattern: 30-year fixed refinance rate at 7.06% (down from 7.11%).
  • Conforming loan rates remain generally lower than government-backed loan rates.
  • Experts forecast mortgage rates to hover around the mid-6% range through 2025, with possible further declines in 2026.
  • Federal Reserve policies and economic factors continue to pressure mortgage rates, with cautious optimism for rate cuts later this year.

Understanding Today’s Mortgage Rates: What’s Happening?

On July 24, 2025, the average national 30-year fixed mortgage rate sits at 6.86%, down 2 basis points from the previous week’s 6.88%. While this may seem like a minor change, it is significant because rates have hovered near their highest levels in years, impacting affordability for homebuyers.

The 15-year fixed mortgage rate ticked up by 3 basis points to 5.90%, and the 5-year ARM rate dropped 6 basis points to 7.63%. ARM loans often attract borrowers seeking lower initial rates but come with the risk of rate adjustments later. These subtle shifts reflect a dynamic market still influenced by inflation concerns, economic policies, and Federal Reserve actions.

Table 1: Current National Average Mortgage Rates (July 24, 2025)

Loan Type Rate Weekly Change APR APR Change
30-Year Fixed 6.86% Down 0.02% 7.31% Down 0.03%
20-Year Fixed 6.28% Down 0.43% 6.76% Down 0.27%
15-Year Fixed 5.90% Down 0.03% 6.19% Down 0.03%
10-Year Fixed 5.72% Down 0.31% 6.09% Down 0.03%
7-Year ARM 6.44% Down 1.13% 7.50% Down 0.46%
5-Year ARM 7.63% Down 0.20% 8.02% Down 0.10%

Source: Zillow Mortgage Data, July 24, 2025

Comparing Conforming Mortgage Rates and Government Loan Rates

Mortgage rates today vary significantly between conforming loans and government-backed loans (FHA, VA):

  • Conforming loans are those that meet the guidelines set by Fannie Mae and Freddie Mac—usually for loan amounts up to $726,200 (in most areas in 2025).
  • Government loans, such as FHA (Federal Housing Administration) and VA (Veterans Affairs) loans, typically serve borrowers with lower credit scores or limited down payments.

Government-backed loan rates are generally higher than conforming loan rates now.

Loan Type Rate Weekly Change APR APR Change
30-Year Fixed FHA 7.75% Up 0.48% 8.79% Up 0.49%
30-Year Fixed VA 6.25% Down 0.11% 6.48% Down 0.10%
15-Year Fixed FHA 5.75% Up 0.28% 6.71% Up 0.24%
15-Year Fixed VA 5.80% Down 0.10% 6.16% Down 0.08%

The higher FHA rates reflect the increased risk lenders associate with these loans, partly due to upfront mortgage insurance fees. Meanwhile, VA loans offer competitive rates close to or better than conforming loans as they carry government guarantees. Borrowers should analyze which programs best suit their financial profile beyond just the rates.

Current Refinance Rates — What You Need to Know

Refinancing can be a strategic move to reduce monthly payments or change loan terms. Today, average national refinance rates stand as follows:

Loan Type Rate Weekly Change APR APR Change
30-Year Fixed Refinance 7.06% Down 0.05% N/A N/A
15-Year Fixed Refinance 5.87% Down 0.02% N/A N/A
5-Year ARM Refinance 7.96% Up 0.03% N/A N/A

Source: Zillow Mortgage Data, July 24, 2025

Even with current rates slightly lower this week, refinance rates are generally higher than purchase mortgage rates. This often happens because refinance loans involve different risk factors and fees.

Calculating What These Rates Mean for Homebuyers

Let’s say you are looking to buy a home priced at $350,000 with a 20% down payment ($70,000), so you finance $280,000.

  • At 6.86%, a 30-year fixed mortgage on $280,000 yields a monthly principal and interest payment of about $1,847.
  • If rates drop by just 0.50% to 6.36%, monthly payments fall to approximately $1,737, nearly $110 less per month.

While that difference might seem small month to month, it adds up to over $1,300 in annual savings — money that could be used for other expenses or investments.

Will Mortgage Rates Drop? Expert Forecasts & Predictions

Several authoritative sources suggest that mortgage rates are expected to ease somewhat during the rest of 2025 and into 2026, but they will likely remain elevated by historical standards:

  • National Association of Realtors (NAR) projects an average mortgage rate around 6.4% in the second half of 2025, dropping to 6.1% in 2026 — tied closely to inflation and Fed policy changes. NAR’s Chief Economist Lawrence Yun describes mortgage rates as a key factor—or “magic bullet”—that will affect housing affordability and sales volumes (NAR Realtors Legislative Meeting, 2025).
  • Realtor.com Housing Forecast anticipates a slow easing of mortgage rates back toward prior-year levels, expecting the rate to dip near 6.4% by year-end 2025, which could fuel slightly improved home sales and a gentle slowdown in price growth.
  • Fannie Mae’s outlook foresees mortgage rates settling around 6.5% in 2025 and dropping to approximately 6.1% in 2026, aligned with mild GDP growth assumptions and inflation expectations.
  • Mortgage Bankers Association expects 30-year mortgage rates to hover near 6.7% through late 2025 and gently ease to about 6.3% by 2026, citing persistent inflation risks as the main factor keeping rates elevated.
  • Morgan Stanley strategists suggest a possible decline in rates linked to anticipated lower Treasury yields if economic growth slows. They highlight how even modest rate drops (e.g., from 7% to 6.25%) can significantly boost housing affordability.
  • Freddie Mac resonates with a similar outlook: While rates have stayed higher than expected during 2024 and early 2025, buyers and sellers may act sooner amid expectations that rates won't fall drastically anytime soon.

The Federal Reserve’s Influence on Mortgage Rates

The Federal Reserve dramatically shapes mortgage rates by setting monetary policy rates and influencing Treasury yields, on which mortgages are often priced.

  • After cutting the federal funds rate by 1% in late 2024, the Fed held rates steady through June 2025.
  • The Fed signals potential rate cuts later in 2025, but timing remains uncertain and controversial among policymakers.
  • The “dot plot” forecasts the federal funds rate falling to about 3.9% by year-end 2025, with further easing expected in 2026 and beyond.
  • Tariffs and inflation remain wild cards influencing policy decisions.
  • The Fed’s next meeting on July 30, 2025, will be closely watched for rate guidance.

Mortgage rates mirror these policies. After peaking around 6.8% in mid-2025, analysts expect rates to decline slowly, potentially reaching the 5% range by 2028 if the Fed consistently cuts rates as anticipated.

Summary Table: Mortgage Rate Trends and Forecasts

Source 2025 Mortgage Rate Outlook 2026 Forecast Notes
National Association of Realtors (NAR) ~6.4% in H2 2025 ~6.1% Linked to inflation and Fed cuts
Realtor.com Dip to ~6.4% by end of 2025 Slow price growth expected Moderate home sales forecast
Fannie Mae Ends 2025 near 6.5% ~6.1% Impact of GDP growth outlook
Mortgage Bankers Association ~6.7% through September 2025 6.3% range for 2026 Persistent inflation concerns
Morgan Stanley Potential slight fall with Treasury yields Further drop if GDP slows Positive for affordability
Freddie Mac Higher than expected, slight easing Moderate price increases, more sales Rate lock-in effect to lessen

Final Thoughts on Today’s Mortgage Rates and Housing Market

From my observation, the current mortgage rates feel like a balancing act between economic uncertainty and buyer optimism. The slight decline in the 30-year fixed rate to 6.86% might not seem dramatic, but it signals that lenders are cautiously responding to evolving economic signals.

Refinance remains a mixed proposition—while rates have eased a bit, they remain high enough to dissuade widespread refinancing unless borrowers have significantly higher original rates or want to switch loan types.

The comparative rate differences between conforming and government loans underscore the complexity each borrower faces: Lower credit scores or smaller down payments often mean higher rates and insurance costs, which can affect a buyer’s ability to close on a home.

Looking ahead, many experts hint at a gradual improvement in affordability, driven mainly by small downward movements in rates and increased home sales volume. But the Federal Reserve’s choices around inflation and rate cuts will be the dominant forces shaping the market.

If you’re watching mortgage rates today and wondering when or how they might move, it’s clear that modest decreases are anticipated, but large drops remain unlikely in 2025. The housing market will continue to adjust slowly rather than leap, making timing and personal finances more critical than ever.

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.

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Housing Market Turmoil: Prices Hit an All-Time High, But Sales Drop

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Home prices hit an all-time high, but sales go down simultaneously. This simply means houses are more expensive than ever, but fewer people are buying them. This situation creates a tricky housing market for everyone involved. Let dive deep into the reasons.

Housing Market Turmoil: Prices Hit an All-Time High, But Sales Drop

The Numbers Don't Lie: A Snapshot of Today's Housing Market

Let's start with the latest information from the National Association of REALTORS® (NAR) and Realtor.com. These experts keep a close watch on the housing market, and here's what their reports are telling us:

  • Home Sales Are Slipping: In the latest NAR Existing-Home Sales Report, existing home sales decreased by 2.7% in June. We’re seeing fewer homes changing hands. According to Realtor.com, sales volume for existing homes is expected to fall 1.5% annually, to just 4 million transactions. That would mark the slowest year for existing-home sales since 1995!
  • Prices Are Sky-High: Despite the drop in sales, the median existing-home price reached a record high of $435,300 in June, a 2% increase from last year. In some areas, the prices are even higher.
  • Inventory Is Up (Slightly): There are more homes available for sale than there were a year ago. The total housing inventory in June was 1.53 million units, up 15.9% from June 2024. This gives buyers more options.
  • Mortgage Rates Remain Elevated: Those seemingly ever-present high mortgage rates are definitely playing a huge role. Freddie Mac reported that the average 30-year fixed-rate mortgage was 6.75% as of July 17th.
  • Homes Are Staying on the Market Longer: The median time a property stays on the market before being sold is now 27 days. This is up from 22 days last year, suggesting homes aren't selling as fast as they used to.

To present this in an easier to read manner, please refer this table.

Metric Change Details
Existing-Home Sales Decrease 2.7% Month-over-month; No change year-over-year
Median Home Price Increase 2% Record high of $435,300
Housing Inventory Up 15.9% 1.53 million units
Mortgage Rate (30-Year) 6.75% As of July 17
Days on Market 27 days Up from 22 days last year; Shows homes are staying longer in the market before getting sold confirming the reduction in sale activity

The Million-Dollar Question: Why This Disconnect?

So, why are these two things – high prices and low sales – happening at the same time? It boils down to a few key factors:

  1. High Mortgage Rates: These rates are the biggest buzzkill for potential buyers right now. When rates are high, it costs more to borrow money, making homes less affordable. A slight increase in the morgage rate will affect the affordability by a wide margin.
  2. Affordability Crisis: Home prices have been climbing for years, outpacing wage growth. Even with slightly more inventory, many people simply can't afford to buy a home, especially with those high mortgage rates.
  3. Inventory Issues: While inventory is up compared to last year, we are still in short supply. The construction of new homes isn't keeping up with the population increase. More homes need to be built to bring prices down and meet the demand.
  4. Sellers Are Hesitant: Some potential sellers are choosing not to list their homes, possibly hoping that the market will improve. We call this the “lock-in effect,” where existing homeowners with low mortgage rates are reluctant to sell and give up those favorable rates.
  5. Economic Uncertainty: People’s confidence has taken a bit of a hit with all the news about inflation, economic downturns, and job security. This situation makes people think twice before spending a fortune on a home.
  6. Homeownership Rate Decline: Due to lack of affordability, and rising prices the homeownership rate is expected to decline to 65.2% this year.

Regional Differences: Where You Live Matters

Here’s the thing – the housing market isn’t the same everywhere. What’s happening in one part of the country might be totally different from what’s happening somewhere else. The NAR report breaks down the numbers by region:

  • Northeast: Sales decreased and prices increased. This area remains a tighter market with steady buyer activity.
  • Midwest: Sales decreased, but prices increased.
  • South: Sales decreased, and prices saw a slight increase. The Southern region has seen the most substantial inventory gains.
  • West: Sales increased slightly, but prices increased. The West is also seeing increased inventory, but affordability is still an issue.

The First-Time Homebuyer Struggle

For those trying to buy their first home, this market is brutal. The median home price is so high, and the down payment needed just keeps getting bigger. Add to that high mortgage rates, and it's easy to see why many first-timers are stuck renting or living with family longer. Remember first-time home buyers accounted for 30% of sales.

The Impact on Renters

Interestingly, while buying a home is getting pricier, the rental market is softening a bit. Asking rents are even expected to decline slightly this year. This could offer some relief for renters who are saving up for a down payment or waiting for the housing market to cool down. Its a small positive change that renters can hang on to.

My Take on What's Next: A Glimmer of Hope?

Okay, so here's where I share my own thoughts on all of this. I think the housing market is at a turning point. While prices are currently high, I don't believe this is sustainable in the long run.

Here's why:

  • Mortgage Rates Can't Stay This High Forever: Eventually, I expect mortgage rates to come down a bit. When that happens, it will give buyers more breathing room and could spur more sales.
  • Increased Inventory Will Eventually Ease Prices: As more homes come onto the market, it will give buyers more negotiating power and, hopefully, put downward pressure on prices.
  • The Economy Will Stabilize: As the economy becomes more predictable, people will feel more confident about making big purchases like homes.

Now, I'm not saying home prices will suddenly crash. But I do think we'll see a more balanced market in the coming years, where buyers have more options and homes are more affordable.

Dr. Lawrence Yun, the chief economist at NAR, believes that if mortgage rates were to decline to 6%, an additional 160,000 renters could become first-time homeowners.

What Should You Do?

So, what does all of this mean for you? Here's my advice, depending on your situation:

  • If You're a Buyer: Don't panic! Take your time, shop around for the best mortgage rates, and don't feel pressured to overpay. It might be worth waiting a bit to see if the market cools down.
  • If You're a Seller: Be realistic about pricing your home. Buyers are more cautious these days, so you might not get as much as you would have a year ago.
  • If You're a Renter: Keep saving! Take advantage of the slightly softer rental market to build up your down payment.

A Balanced Market Will Benefit Everyone

In the end, a healthy housing market is good for everyone. It's not just about high prices benefiting sellers or low prices benefiting buyers. We need a market where people can afford to buy homes, where sellers can get a fair price, and where the housing market contributes to a strong economy. This balance will take years to achieve, which is why the younger generation is finding it difficult to get into the housing market.

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Chicago Housing Market: Trends and Forecast 2025-2026

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So, you're curious about the current Chicago housing market trends? You're not alone! Whether you're looking to buy, sell, or just keep an eye on things, understanding the market is key. In short, while things have cooled off a bit from the crazy days of the pandemic, the Chicago market remains relatively stable. Home prices are still appreciating modestly, but inventory remains tight, creating a slightly competitive environment for buyers. Let's dive into the details and see what's really happening in the Chicago real estate scene.

Chicago Housing Market Trends: What's Happening Right Now?

Home Sales

One of the first things to look at when assessing the health of the market is the number of homes being sold.

  • Chicago Metro Area: According to Illinois REALTORS®, in May 2025, we saw 8,689 closed sales, which is a 4.9% decrease compared to May 2024 (9,135). Year-to-date, the Chicago metro area has seen 33,662 closed sales, a 0.8% decrease from the same period last year (33,940).
  • City of Chicago: The City of Chicago saw 12,674 closed sales in May 2025, a 4.7% decrease compared to May 2024 (13,300). Year-to-date, closed sales in the city are at 49,378, a 0.8% decrease from the same period last year (49,788).
  • Illinois: Across the entire state, closed sales in May 2025 totaled 12,674, which is 4.7% less than the previous year’s sales (13,300). So far, in 2025 there have been 49,378 closed sales, a 0.8% decrease compared to the 49,788 sales during the same period last year.

What does this mean? Well, fewer sales could indicate a few things. It might be that fewer people are listing their homes, or perhaps buyers are being more cautious. Let's look at prices to get a clearer picture.

Chicago  Home Prices

Alright, let's talk about what everyone really wants to know: how much are homes going for?

  • Chicago Metro Area: The median sales price in the Chicago metro area in May 2025 was $379,900, a 5.5% increase from $360,000 in May 2024.
  • City of Chicago: In the City of Chicago, the median sales price in May 2025 was $315,000, a 5.0% increase from $300,000 in May 2024.
  • Illinois: The median sales price across the entire state in May 2025 was $315,000, marking a 5.0% increase from $300,000 in May 2024.

Are Home Prices Dropping in Chicago?

No, not exactly. While sales are down slightly, prices are still going up. It's not the crazy double-digit growth we saw a couple of years ago, but it's still appreciation. This suggests that demand is still relatively strong, even with higher mortgage rates.

Housing Supply

Now, let's look at the inventory of homes available. This is a crucial factor in determining whether it's a buyer's or seller's market.

  • Chicago Metro Area: In May 2025, there were 13,195 homes for sale in the Chicago metro area, which is a 3.4% increase compared to May 2024 (12,759).
  • City of Chicago: The city had 19,890 homes on the market in May 2025, which is a 6.0% increase compared to May 2024 (18,758).

An increase in inventory is generally good news for buyers, giving them more options to choose from and potentially more leverage in negotiations.

Days on Market Until Sale

How long are homes sitting on the market before they sell? This is another important indicator.

  • Chicago Metro Area: Homes in the Chicago metro area were on the market for an average of 29 days in May 2025, compared to 28 days in May 2024, a 3.6% increase.
  • City of Chicago: In the City of Chicago, homes were on the market for an average of 33 days in May 2025, compared to 32 days in May 2024, a 3.1% increase.

A slight increase in the days on market suggests that the market is cooling down a bit. Homes aren't flying off the shelves as quickly as they were a year or two ago.

Is Chicago a Buyer's or Seller's Housing Market?

This is the million-dollar question! Based on the data, I'd say it's currently a balanced market, leaning slightly towards a seller's market. Here's why:

  • Prices are still rising: Sellers are still getting more for their homes than they were a year ago.
  • Inventory is increasing: But not dramatically. While there are more homes on the market, supply is still relatively constrained.
  • Days on market are slightly up: But homes are still selling relatively quickly.

Market Trends

So, what are the overarching trends we're seeing in the Chicago housing market?

  • Modest Price Appreciation: Prices are still going up, but at a more sustainable pace. We're not seeing the bidding wars and rapid escalation that characterized the market in 2021 and 2022.
  • Slightly Increased Inventory: More homes are coming onto the market, giving buyers more choices.
  • Longer Time on Market: Homes are taking a bit longer to sell, giving buyers more time to consider their options.
  • Balanced Market: Overall, the market is relatively balanced, with neither buyers nor sellers having a significant advantage.

Here's a quick table summarizing the key data points:

Metric Chicago Metro Area (May 2024) Chicago Metro Area (May 2025) Change (%) City of Chicago (May 2024) City of Chicago (May 2025) Change (%)
Closed Sales 9,135 8,689 -4.9% 13,300 12,674 -4.7%
Median Sales Price $360,000 $379,900 +5.5% $300,000 $315,000 +5.0%
Inventory of Homes for Sale 12,759 13,195 +3.4% 18,758 19,890 +6.0%
Days on Market Until Sale 28 29 +3.6% 32 33 +3.1%

Impact of High Mortgage Rates

Of course, we can't talk about the housing market without mentioning mortgage rates. Currently, U.S. weekly averages as of 07/17/2025, the average 30-year fixed mortgage rate is around 6.75%, and the 15-Year FRM is about 5.92%, according to the Primary Mortgage Market Survey® by Freddie Mac. The 30-year fixed-rate mortgage inched up this week and continues to stay within a narrow range under 7%.

These rates are significantly higher than the sub-3% rates we saw during the pandemic, which has definitely impacted affordability. It makes it more expensive to borrow money, which can deter some buyers.

According to various forecasts, the 30-year FRM rate will end 2025 between 6.0 to 6.5 percent. Borrowers should find comfort in the stability of mortgage rates, which have only fluctuated within a narrow 15-basis point range since mid-April.

My Take on the Chicago Market

As someone who's been following the Chicago real estate market for years, I think we're in a period of adjustment. The frenzy of the past few years was unsustainable, and the current market is much more balanced and healthy in the long run.

I think that even though mortgage rates are at 6.75%, people will keep buying homes, especially if rates drop to between 6.0% and 6.5% by the end of 2025. While buying a home has become more difficult, stability in mortgage rates will encourage potential buyers. The market is also seeing a slight increase in inventory, meaning buyers have more choices and greater negotiating leverage.

For buyers, this means you have more time to shop around and negotiate. Don't feel pressured to make a snap decision. Take your time, do your research, and find the right property for you. I encourage buyers to focus on how much they can afford per month rather than obsessing over the interest rate and try to buy homes that fits their lifestyle in the long run.

For sellers, it means you need to be realistic about your pricing expectations. You can't expect to get the same prices that homes were fetching a year or two ago. Work with a knowledgeable real estate agent to price your home competitively and make sure it's in top condition.

The Bottom Line

The current Chicago housing market trends show a market that is stabilizing after a period of rapid growth. Prices are still appreciating, but at a more moderate pace. Inventory is increasing slightly, and homes are taking a bit longer to sell. While higher mortgage rates are impacting affordability, the market remains relatively balanced. Whether you're a buyer or a seller, understanding these trends is crucial for making informed decisions.

Chicago Housing Market Forecast 2025-2026: What's Coming Up?

Based on the latest data, the Chicago housing market forecast for 2025 looks promising. We can expect a modest level of sales increase and home prices are likely to continue to grow into next year too! The projected increase is nearly six percent compared to 2024! Keep reading to understand the reasoning behind this and the trends that cause these predictions

Let's break down what's been happening recently in the Chicago area housing market. According to the Institute for Housing Studies at DePaul University, here's a snapshot of May 2025:

  • There were 8,689 closed sales of houses, townhomes, and condos in the entire Chicago metro area.
  • Single-family home prices jumped 6.3% compared to May 2024.
  • However, the number of single-family home sales actually went down 3.5% compared to last year.
  • Here's a bit of good news for buyers: The number of houses for sale increased by 3.9% since last May.
  • Homes are sitting on the market a little longer, about 5.3% (1 day) The market isn't seeing a drastic shift, just a normal fluctuation.

What I gather from these figures is that even though are a little bit highers on the market, the demand is still there, even though there are many reasons why people are hesitant to buy houses.

Chicago vs. the Suburbs: A Tale of Two Markets

It's important to look at how the city of Chicago compares to the rest of the metro area. Here's what's been going on within Chicago itself:

  • In Chicago, there were 2,286 closed sales homes.
  • House prices in the city soared 9.4% since May 2024. That's a big jump!
  • The number of single-family home sales dropped 2.1%, similar to the overall metro trend.
  • Here's where it gets interesting: the number of homes for sale in Chicago plunged nearly 16% compared to last year. That means there's a lot less to choose from, which could be driving up prices.
  • It took a little longer to sell a house 5.1% (2 days)

It seems to me that the city is a hotter market than the suburbs right now, with prices rising faster and fewer homes available.

Condos and Townhomes: A Different Story?

Let's not forget about condos and townhomes in the city. Here's what's been happening with them:

  • Prices for condos and townhomes in Chicago rose 4.4% since May 2024.
  • The number of condo sales fell 10%.
  • The number of condos for sale is down 11.4%.
  • However, condos are selling faster – the time on the market went down 13.4% (3 days).

So, while condo prices are up, fewer people are buying them, and there are fewer available. But when they do sell, they're selling quicker!!

Short-Term Outlook: Summer Sales

What about the next few months? Here's what the Institute for Housing Studies predicts for the Chicago metro area:

  • Sales of single-family homes will probably go up and down, peaking in June which will follow seasonal changes.
  • The total sales for June, July, and August should be around 3.9% heigher than last year.
  • Prices of houses in the Chicago Metropolitan Area are expected to increase slightly before declining throughout the summer months, with overall the price increase being similar to what it was during May.

For Chicago itself:

  • Single-family home prices in Chicago are expected to increase slightly between May and August.

Condo prices are expected to decrease slightly between May and August. This is something to keep your eye on.

2026: Peering into the Crystal Ball

While it's tough to say for sure what 2026 will bring, I can offer some thoughts. If interest rates stay relatively stable or even decrease, this could make homes more affordable and boost sales. We might see a continued increase in home prices, but at a more moderate pace than what we've seen recently.

On the flip side, if the economy slows down significantly, it could put downward pressure on the housing market.* More people could be hesitant to buy. The economy really does dictate everything! I think the Chicago housing market is more than likely very healthy.

Based on current trends and expert forecasts, I believe the Chicago housing market will remain stable with continued price growth.

Is Chicago a Good Place for Real Estate Investment for 2025?

Population Growth and Trends

Chicago, known for its diverse neighborhoods and rich history, has been experiencing steady population growth over the years. The city's population growth is driven by factors such as employment opportunities, higher education institutions, and cultural attractions. The diverse demographic makeup of Chicago provides a broad tenant pool for real estate investors, making it an attractive market.

  • Diverse Demographics: Chicago's diverse population ensures a wide range of tenant preferences and needs, reducing the risk of high vacancy rates.
  • Steady Growth: The city's population growth indicates a consistent demand for housing, especially in well-located neighborhoods.

Rehabbed Homes Fix and Flip Opportunities

Chicago's real estate market offers lucrative opportunities for fix and flip investors. Many older properties in desirable neighborhoods are prime candidates for rehabilitation and resale. This segment of the market can yield significant profits for investors with the right skills and resources.

  • Older Properties: Chicago has a substantial inventory of older homes that can be acquired at competitive prices and then renovated for profit.
  • Increasing Demand: Renovated homes in sought-after neighborhoods are in high demand, allowing for premium pricing.

Economy and Jobs

The strength of the local economy plays a crucial role in real estate market stability. Chicago's diverse economy is bolstered by various industries, including finance, technology, manufacturing, and healthcare. The city offers a robust job market, which is attractive to both renters and potential buyers.

  • Diverse Economy: A mix of industries reduces the risk associated with economic downturns in a specific sector.
  • Job Opportunities: A strong job market ensures a constant influx of renters and potential homebuyers.

Livability and Other Factors

Chicago's livability is a key factor for real estate investors. The city's vibrant cultural scene, excellent public transportation, and diverse dining options contribute to its appeal. Additionally, the city's commitment to infrastructure and public services further enhances its livability.

  • Cultural Attractions: Chicago offers world-class cultural experiences, attracting residents and tourists alike.
  • Public Transportation: An extensive public transit system makes it convenient for residents to commute, reducing the importance of owning a car.

Chicago Rental Property Market Size and Growth

The size and growth of the Chicago rental property market are promising for investors. The city's diverse neighborhoods and housing options cater to a wide range of tenant preferences. This, coupled with population growth, ensures a robust and expanding rental market.

  • Diverse Neighborhoods: Chicago's neighborhoods offer various housing options, from apartments to single-family homes, appealing to a wide range of renters.
  • Growth Potential: With a growing population, the demand for rental properties is likely to continue to rise.

Other Factors Related to Real Estate Investing

When considering real estate investment in Chicago, it's essential to account for various other factors:

  • Local Regulations: Familiarize yourself with Chicago's property regulations and tax laws to ensure compliance and maximize returns.
  • Market Research: Thoroughly research neighborhoods and property types to identify areas with growth potential.
  • Property Management: Whether you plan to manage properties yourself or hire a management company, effective property management is vital for success.

Investing in the Chicago real estate market offers numerous advantages. The city's population growth, diverse demographics, job opportunities, and livability make it an attractive destination for real estate investors. Additionally, the fix and flip opportunities, the size and growth of the rental market, and other related factors provide a solid foundation for potential returns on investment. However, it's crucial to conduct thorough research, stay informed about local regulations, and manage properties effectively to maximize the benefits of investing in Chicago's real estate market.

Highest Appreciating Chicago Neighborhoods

Chicago has witnessed significant changes in its neighborhoods since the year 2000. Here are the neighborhoods that have experienced the highest appreciation in terms of property values, according to Neighborhoodscout.

W Wabansia Ave / N Whipple St

Located in the heart of Chicago, the W Wabansia Ave / N Whipple St neighborhood has seen remarkable property value appreciation. This area's proximity to various amenities and its strong community appeal have contributed to its growth.

Humboldt Park Northeast

The Humboldt Park Northeast neighborhood has seen a steady increase in property values since 2000. The neighborhood's green spaces, cultural attractions, and improving infrastructure have made it an attractive destination for homebuyers and investors.

W Wabansia Ave / N Kimball Ave

This neighborhood, situated near W Wabansia Ave and N Kimball Ave, has experienced substantial property value appreciation. The presence of local businesses, parks, and good public transportation options has boosted its desirability among residents and investors.

Palmer Square East

Palmer Square East is another neighborhood that has seen significant appreciation in property values. Its charming streets, proximity to parks, and vibrant local scene have made it a sought-after area for both residents and real estate investors.

W Wabansia Ave / N Francisco Ave

The W Wabansia Ave / N Francisco Ave neighborhood has been on an upward trajectory in terms of property values. Its location and access to various amenities have attracted homebuyers and investors looking for long-term growth.

Logan Square Northwest

Logan Square Northwest is known for its thriving arts and dining scene. The neighborhood's cultural appeal, coupled with improved public services and transportation, has contributed to its property value appreciation.

W Cortland St / N Mozart St

W Cortland St / N Mozart St is a neighborhood that has experienced remarkable growth in property values. Its accessibility to urban conveniences and a sense of community have made it a desirable place to live and invest.

Palmer Square

Palmer Square, located in Chicago, has seen substantial property value appreciation. The neighborhood's green spaces, historic architecture, and community activities have made it a popular choice for homeowners and real estate investors.

Humboldt Park North

Humboldt Park North, with its green expanses and recreational opportunities, has seen a consistent increase in property values since 2000. The neighborhood's combination of natural beauty and urban amenities has attracted both residents and investors.

W Cortland St / N Albany Ave

W Cortland St / N Albany Ave is another Chicago neighborhood that has experienced substantial appreciation in property values. Its accessibility to city amenities and transportation options have bolstered its appeal to homebuyers and real estate investors.

These neighborhoods have not only appreciated in property values but also offer various amenities, community vibes, and urban conveniences, making them attractive options for both residents and real estate investors seeking long-term growth and value appreciation in Chicago.

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Today’s Mortgage Rates: The States Offering Lowest Rates – July 23, 2025

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Looking to buy a home and snag the best mortgage rate possible? You're probably wondering: where can I find the lowest mortgage rates today? As of Tuesday, the states boasting the cheapest 30-year new purchase mortgage rates are New York, Colorado, Washington, California, North Carolina, Tennessee, Florida, New Jersey, and Massachusetts, where average rates hover between 6.65% and 6.82%. It's time to dive into why these rates fluctuate and how you can take advantage of these lower numbers.

Today's Mortgage Rates: The States Offering Lowest Rates

Decoding Mortgage Rate Variations Across States

It's fascinating how mortgage rates can differ from state to state. It's not just some random lottery, but rather a cocktail of economic factors and local market conditions. Here’s a breakdown of what's behind these differences:

  • Lender Presence: Not every lender is available in every state. The level of competition among mortgage lenders in each state can significantly impact rates. More competition usually translates to better deals for borrowers as lenders jockey for your business.
  • State-Level Regulations: Each state has its own set of rules and regulations governing the mortgage industry. These regulations can affect the cost of doing business for lenders, which they may then pass on to borrowers in the form of higher interest rates.
  • Credit Score Averages: States with higher average credit scores might see lower rates overall. Lenders see borrowers with better credit as less risky, so they offer them better terms.
  • Average Loan Size: This might seem counterintuitive, but states with smaller loan sizes can sometimes see higher rates. Lenders might need to charge more to make the loan profitable if the loan amount is lower.
  • Risk Management Strategies: Every lender has its own approach to managing risk. This can include things like being more conservative in certain markets or focusing on specific types of borrowers.

Seeing these numbers and understanding the reasons behind them always makes me think of the importance of doing your research. The mortgage process can feel overwhelming, but knowledge is truly power!

Current National Mortgage Rate Trends

Let’s zoom out from the state level and look at the national picture. Mortgage rates seem to be stabilizing after a period of some volatility.

  • The average rate for a 30-year new purchase mortgage is 6.84%, which is down 7 basis points from the previous two days.
  • Last week, the rate was 6.91%, which was a high since mid-June.
  • We’ve come a long way from May 2025, when rates spiked to 7.15%, a one-year high.
  • Thinking back to March 2025, rates were at their lowest average for the year, around 6.50%.
  • And who can forget September 2024, when rates hit a two-year low of 5.89%?

Here's a quick rundown of the national averages for different types of mortgages:

Loan Type New Purchase Rate
30-Year Fixed 6.84%
FHA 30-Year Fixed 7.55%
15-Year Fixed 5.87%
Jumbo 30-Year Fixed 6.78%
5/6 ARM 7.37%

Highest Mortgage Rate States

According to Investopedia's report and Zillow's data, on the other end of the spectrum, here are the states with the highest 30-year new purchase mortgage rates as of July 23, 2025: West Virginia, Alaska, Washington D.C., South Dakota, New Mexico, North Dakota, Oklahoma, Rhode Island, and Wyoming. In these states, the average rates range from 6.90% to 6.97%.

There could be many factors contributing to these slightly higher rates, and it's worth investigating further if you plan to buy property in any of these locations.

What Drives Mortgage Rates? Understanding the Big Picture

To really understand mortgage rates, you need to know what makes them tick. These rates are like dancers following the music of the broader economy. Here are some leading musicians:

  • The Bond Market: Mortgage rates often mirror the movements of the bond market, especially the 10-year Treasury yield. When bond yields rise, mortgage rates usually follow suit.
  • The Federal Reserve (The Fed): The Fed's actions have a huge impact. This includes everything from buying bonds to setting the federal funds rate.
  • Competition Among Lenders: As mentioned before, competition is a key driver. Lenders will often lower rates to attract more borrowers, particularly when demand for mortgages is high.

Thinking back to the economic climate of the past few years, we saw some significant shifts:

  • 2021: The Fed was buying bonds like crazy to combat the economic fallout from the pandemic. This kept mortgage rates artificially low.
  • Late 2021 – 2023: The Fed started pulling back on bond purchases and aggressively raised the federal funds rate to fight high inflation. This caused mortgage rates to rise sharply.

The Federal Reserve's Influence: Present Day

The Fed's policies continue to be important. While the pandemic emergency is over, the Fed is still playing a significant role in the economy.

  • Recent Fed Actions: The Fed cut rates three times in late 2024, bringing the federal funds rate down to a target range of 4.25%–4.5%.
  • Future Rate Cuts: The Fed is projected to cut rates a couple more times in 2025, potentially bringing the federal funds rate down to 3.9% by the end of the year. Of course, there are split opinions as some want cuts sooner and some want to wait longer.
  • Inflation and Tariffs: The dreaded “I” word – Inflation of even the mention of tariffs can have an impact on Fed policy decisions. While the Fed is trying to balance inflation control with economic growth, any big shifts in these areas can affect how they respond.

Mortgage Rates Implication:

  • The 30-year mortgage rate averaged 6.7% in 2024 and is hovering around 6.8% as of late June of 2025. Experts project that rates could potentially fall to 5% by 2028*. Again, this of course depends on rates if the Fed actually follows through on the rumored rate cuts.

Shopping Around for the Best Mortgage Rate

Regardless of the national or state trends, there’s one golden rule: shop around. Mortgage rates can vary significantly from lender to lender, so it pays to do your homework.

  • Compare Rates: Don't just settle for the first rate you see. Get quotes from multiple lenders to see who can offer you the best deal.
  • Factor in Fees: Pay attention to fees as well as the interest rate. Sometimes a slightly higher rate with lower fees can be a better deal in the long run.
  • Understand Points: Some lenders offer lower rates in exchange for paying points upfront. This can be a good option if you plan to stay in the home for a long time, but it might not be worth it if you plan to move soon.
  • Talk to a Mortgage Broker: A mortgage broker can help you compare rates from multiple lenders and guide you through the mortgage process.

Remember, the rates you see advertised online are often “teaser rates” designed to attract your attention. The actual rate you qualify for will depend on your individual circumstances, including your credit score, income, and debt-to-income ratio.

Invest in Real Estate in the Top U.S. Markets

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Expand your portfolio confidently, even in a shifting interest rate environment.

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Mortgage Rates Today July 23, 2025: Rates Go Down Overall Benefiting Homebuyers

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Mortgage rates today, July 23, 2025, for a 30-year fixed mortgage have slightly decreased to an average of 6.82%, down from 6.83% the previous day and 6.88% a week ago, according to Zillow. This signals a small but steady dip in mortgage rates amid ongoing economic shifts. Similarly, refinance rates for a 30-year fixed loan also decreased to 7.05%.

The 15-year fixed mortgage rate is at 5.87%, with a slight decrease as well. Essentially, while rates remain historically elevated compared to a few years ago, they are showing small declines this week, offering a glimmer of potential relief for homebuyers and those looking to refinance their mortgages.

Mortgage Rates Today July 23, 2025: Rates Go Down Overall Benefiting Homebuyers

Key Takeaways

  • 30-year fixed mortgage rate dropped slightly to 6.82% on July 23, 2025.
  • 30-year fixed refinance rate also decreased to 7.05% this week.
  • 15-year fixed mortgage and refinance rates have edged down, currently 5.87% and 5.88% respectively.
  • Conforming loan rates are marginally lower this week, while some government-insured loan rates have mixed small increases and decreases.
  • Mortgage rate forecasts by major organizations indicate rates may remain elevated or slightly decrease by the end of 2025 and into 2026.
  • Fed policy, inflation, and economic growth projections strongly influence these mortgage rate trends.

Current Mortgage Rates on July 23, 2025

According to Zillow's latest data, here is a summary of the national average mortgage rates for different loan programs:

Loan Type Rate (%) Week Change (%) APR (%) APR Change (%)
30-Year Fixed 6.82 -0.01 7.33 -0.02
20-Year Fixed 6.29 -0.43 6.75 -0.28
15-Year Fixed 5.87 -0.01 6.21 -0.01
10-Year Fixed 6.03 0.00 6.12 0.00
7-Year ARM 7.63 +0.05 7.86 -0.10
5-Year ARM 7.72 -0.11 8.08 -0.04

Government-Backed Loans:

Loan Type Rate (%) Week Change (%) APR (%) APR Change (%)
FHA 30-Year Fixed 7.75 +0.48 8.79 +0.48
VA 30-Year Fixed 6.15 -0.21 6.32 -0.25
FHA 15-Year Fixed 5.98 +0.52 6.95 +0.48
VA 15-Year Fixed 5.78 -0.11 6.23 -0.01

Rates are subject to daily changes and can vary by lender and location.

Conforming vs. Government-Backed Mortgage Rates

Many borrowers encounter two major categories when shopping for a mortgage: Conforming loans and Government-backed loans.

  • Conforming Loans are typical mortgages that meet the criteria set by government-sponsored enterprises like Fannie Mae and Freddie Mac. These usually have stricter credit score and income requirements but tend to offer competitive interest rates for qualified borrowers.
  • Government-backed Loans such as FHA, VA, and USDA loans provide insurance or guarantees to lenders, making them more accessible to borrowers with lower credit scores or smaller down payments. These loans often have slightly higher interest rates, as seen in the current FHA 30-year fixed rate at 7.75%, compared to 6.82% for conforming loans.

The differences in risk to lenders and borrower profiles explain the variation in rates — government loans protect lenders from default risk at the cost of slightly higher rates for borrowers.

Current Refinance Rates – July 23, 2025

Refinance rates have also followed a slight downward adjustment this week. The national average rates for refinance loans are:

Loan Program Rate (%) Weekly Change (%) APR (%) APR Change (%)
30-Year Fixed Refi 7.05 -0.01 7.34 -0.02
15-Year Fixed Refi 5.88 -0.05 6.22 -0.02
5-Year ARM Refi 7.94 +0.02 8.17 +0.01

Refinancing remains a popular option for homeowners to lower monthly payments or take cash out of equity, though higher rates than the standard purchase mortgage suggest cautious appraisal of benefits.

What’s Behind Today’s Mortgage and Refinance Rates?

Mortgage rates are influenced by several factors:

  • Federal Reserve Monetary Policy: The Fed influences short-term interest rates but indirectly affects mortgage rates through bond markets and inflation expectations.
  • Inflation and Economic Growth: Higher inflation tends to push mortgage rates up, while economic slowdowns can reduce pressure on borrowing costs.
  • Housing Market Dynamics: Demand, inventory levels, and home prices impact lenders’ appetite and risk assessments.

The Federal Reserve cut rates by 1% last fall but has held steady in mid-2025, with expectations for gradual rate cuts later this year or in 2026. The Fed’s “dot plot” median forecast shows the federal funds rate dropping to around 3.9% by the end of 2025, which may later reduce mortgage rates. However, inflation from tariffs and other economic variables inject uncertainties in timing.

Mortgage Rate Forecasts and Economic Outlook

Let's analyze what major institutions say about the future of mortgage rates and housing affordability.

  • Fannie Mae: Projects mortgage rates ending 2025 around 6.5%, dropping to 6.1% in 2026. They predict moderate GDP growth (1.4% in 2025, 2.2% in 2026) supporting a balanced economic climate and more stable rates.
  • Mortgage Bankers Association (MBA): Projects 30-year fixed mortgage rates mostly unchanged near 6.8% through September 2025, then slight decline to mid-6% by year's end and steady 6.3% into 2026. Inflation risks continue to influence their outlook.
  • Morgan Stanley: Suggests potential for mortgage rate declines correlating with Treasury yields lowering if GDP slows in 2026. They provide an illustrative example: on a $1 million house, monthly payment at 7% interest is about $5,322; if rates fall to 6.25%, the payment drops to $4,925—a savings of nearly $400 monthly.
  • Freddie Mac: Notes that rates remaining higher than expected may prompt buyers and sellers to act sooner rather than wait for lower rates, increasing market activity but with sales volume below long-term averages.

The forecasts indicate a landscape where rates may hover high in the near term but could ease moderately by 2026, supporting housing affordability improvements.

Mortgage vs. Refinance Rate Example Calculations

To illustrate the impact of today's rates on a typical loan scenario, consider this:

  • Purchase Mortgage Example:
Loan Amount $350,000
Mortgage Rate 6.82%
Loan Term 30 years
Monthly Principal & Interest Payment (approx.) $2,268
  • Refinance Example:

If refinancing $350,000 at 7.05% (30-year fixed):

Loan Amount $350,000
Refinance Rate 7.05%
Loan Term 30 years
Monthly Payment (approx.) $2,363

Difference monthly = $2,363 – $2,268 = $95 more per month if refinancing at current rates compared to a new purchase mortgage rate, showing refinancing might not make sense unless there are other benefits like cash-out or shorter terms.

Impact of Federal Reserve's Policies on Mortgage Rates

The Fed's recent rate cuts in late 2024 brought the federal funds rate down to 4.25%-4.5%, stabilizing since then. In 2025, the Fed signaled potential additional rate cuts, but policymakers remain divided on timing—with some expecting cuts as early as July 2025, and others preferring September or later.

Factors influencing these decisions:

  • Inflation pressures from tariffs and global issues.
  • Economic growth slowing (GDP forecasted at 1.4% for 2025).
  • Rising unemployment slightly above historical lows at 4.5%.
  • Political pressures balanced by Fed’s data-focused approach.

As mortgage rates are closely tied to Treasury yields and overall monetary policy, Fed actions remain a key driver in whether mortgage rates fall or stay elevated in coming months. The Fed’s July 30, 2025 meeting is expected to hold rates steady but could signal adjustments depending on inflation and employment data.

Mortgage and Refinance Rates Summary Table

Rate Type Current Rate (%) Weekly Change (%) Notes
30-Year Fixed Purchase 6.82 -0.01 Slight decrease, still above pre-pandemic averages
15-Year Fixed Purchase 5.87 -0.01 Minor decrease, more affordable option
30-Year Fixed Refinance 7.05 -0.01 Still higher than purchase rates
15-Year Fixed Refinance 5.88 -0.05 Small decrease, competitive for shorter terms
5-Year ARM Purchase 7.72 -0.11 Adjustable rates declining slightly

Every housing market cycle varies, but July 2025 shows a slight cooling in mortgage and refinancing rates compared to recent weeks. Borrowers should keep an eye on Fed announcements and economic indicators to time decisions. With mortgage and refinance rates hovering near 7% for 30-year loans, affordability remains a crucial issue for many Americans trying to enter or move within the housing market.

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.

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Today’s Mortgage Rates: The States Offering Lowest Rates – July 22, 2025

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Looking for the absolute lowest mortgage rates? As of Monday, the states offering the cheapest 30-year new purchase mortgage rates are New York, California, Florida, Washington, North Carolina, and Pennsylvania. In these states, expect to see average rates ranging between 6.64% and 6.83%. Let’s dive deeper into what's driving these rates and how you can snag the best deal possible.

Today’s Mortgage Rates: The States Offering Lowest Rates

Why Do Mortgage Rates Vary By State?

You might be wondering, “Why isn't there just one national mortgage rate?” Great question! Several factors contribute to the state-by-state differences in mortgage rates:

  • Regional Lender Presence: Not all lenders operate in every state. The level of competition among lenders directly impacts rates. More competition usually means lower rates.
  • State-Level regulations: Rules about interest rates and foreclosure processes can add a layer of regulatory-related fees.
  • Credit Score Averages: States with higher average credit scores may see slightly lower rates overall, as lenders perceive less risk. Credit scores are majorly responsible for interest rates applicable to home loans.
  • Average Loan Size: The average home price and subsequent loan amount can play a role. Larger loan portfolios might allow lenders to offer slightly different rates.
  • Risk Management Strategies: Every lender has its own way of assessing risk. Some might be more aggressive in certain states, leading to variations in rates.

Digging into the Numbers:

According to Investopedia's report and Zillow's data, here's a breakdown of the states offering the lowest 30-year fixed mortgage rates for new purchases:

  • Lowest Rate States (6.64% – 6.83%):
    • New York
    • California
    • Florida
    • Washington
    • North Carolina
    • Pennsylvania
    • Georgia
    • Texas
  • Highest Rate States (6.91% – 6.95%):
    • West Virginia
    • Alaska
    • New Mexico
    • Kansas
    • North Dakota
    • Oklahoma
    • Rhode Island
    • South Dakota
    • Washington, D.C.
    • Wyoming

National Averages:

To put things in perspective, here's a glance at the national averages for different loan types:

Loan Type New Purchase Rate
30-Year Fixed 6.84%
FHA 30-Year Fixed 7.55%
15-Year Fixed 5.86%
Jumbo 30-Year Fixed 6.79%
5/6 ARM 7.38%

The Importance of Shopping Around

This can't be overstated: Always shop around for mortgage rates! Just because one lender offers you a certain rate doesn't mean it's the best rate you can get. Comparing rates from multiple lenders is crucial, regardless of the type of home loan you're seeking.

Don't Fall for the Teaser Rate Trick

Be very cautious of advertised mortgage rates you see online. These are often teaser rates designed to grab your attention. The fine print usually reveals that these rates require:

  • Paying points upfront (essentially, pre-paying interest)
  • An ultra-high credit score
  • A smaller-than-typical loan amount

The actual rate you qualify for will depend on your individual financial situation.

Factors Affecting Your Personal Mortgage Rate

When lenders determine your personal mortgage rate, they consider several factors, including:

  • Credit Score: A higher credit score typically results in a lower interest rate.
  • Income and Debt-to-Income Ratio (DTI): Lenders want to ensure you can comfortably repay the loan. A lower DTI is generally favorable.
  • Down Payment: A larger down payment reduces the lender's risk.
  • Loan Type: Different loan types (e.g., fixed-rate, adjustable-rate, FHA, VA) come with varying rates and requirements.
  • Property Type: Is it a single-family home, condo, or investment property? This can affect your rate.

Let's Talk Payment: Understanding Your Monthly Costs

Don't just focus on the interest rate! Understand all the costs that make up your monthly mortgage payment. These typically include:

  • Principal and Interest: The actual loan repayment
  • Property Taxes: A significant expense that varies by location
  • Homeowners Insurance: Protects your property from damage or loss
  • Private Mortgage Insurance (PMI): Required if your down payment is less than 20%

What Makes Mortgage Rates Move? Understanding the Big Picture

Mortgage rates don't exist in a vacuum. They're influenced by a complex interplay of economic forces:

  • The Bond Market: Mortgage rates closely track the movement of 10-year Treasury yields. When yields rise, mortgage rates often follow suit.
  • The Federal Reserve (The Fed): The Fed's monetary policy has a significant impact. Decisions about interest rates and bond buying can directly influence mortgage rates.
  • Inflation: High inflation can lead to higher interest rates as the Fed tries to cool down the economy.
  • Economic Growth: A strong economy can push interest rates higher as demand for credit increases.

Decoding the Fed's Recent Actions

The Federal Reserve's role in shaping mortgage rates is undeniable.

  • Recent Fed Actions and Rate Trajectory:
    • Rate Cuts in Late 2024: The Fed cut rates three times in late 2024 (September to December), reducing the federal funds rate by 1 percentage point to a target range of 4.25%–4.5%, where it has remained through June 2025
    • 2025 Outlook: The Fed’s June 2025 meeting reaffirmed plans for two rate cuts in 2025, with possibilities of officials advocating for cuts by July 2025 or later in September
    • “Dot plot” shows a median projection of the federal funds rate falling to 3.9% by year-end 2025 with more future cuts to happen at 2026-2027
  • Key Influences on Fed Policy:
    • Tariffs and Inflation: Fed Chair Jerome Powell expects “meaningful” inflation from tariffs, The Fed views this as a temporary shock, not requiring rate hikes, but it complicates the timing of cuts.
    • The Fed anticipates a gradual easing cycle, with rates settling near 2.25%–2.5% by 2027.

Putting It All Together: What to Do Next

If you're in the market for a mortgage, here's my advice:

  1. Check Your Credit: Make sure your credit report is accurate and address any errors.
  2. Save for a Down Payment: A larger down payment gives you more options and potentially a lower rate.
  3. Shop Around: Compare rates from multiple lenders, including banks, credit unions, and online mortgage companies.
  4. Get Pre-Approved: A pre-approval gives you a firm idea of how much you can borrow and strengthens your offer on a home.

Final Thoughts

Navigating the mortgage market can feel overwhelming, but understanding the factors that influence rates – both nationally and at the state level – can empower you to make informed decisions. Remember, the lowest rate isn't always the best deal. Focus on finding a loan that fits your budget and long-term financial goals.

Invest in Real Estate in the Top U.S. Markets

Investing in turnkey real estate can help you secure consistent returns with fluctuating mortgage rates.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now

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