30-Year Fixed Mortgage Rate (FRM) Drops Today by 12 Basis Points – August 7, 2025

If you're looking to buy a home or refinance, good news! The national average for a 30-Year Fixed Mortgage Rate (FRM) has dropped today, August 7, 2025, by 12 basis points, bringing it down to 6.70%. The previous week's average rate was 6.82%. While rates have been fluctuating quite a bit lately, this dip offers a bit of potential relief for borrowers. Let's dig into what this means for you, and why it's happening.

30-Year Fixed Mortgage Rate (FRM) Drops Today by 12 Basis Points – August 7, 2025

What's Driving This Slight Dip?

Okay, so a 12 basis point drop isn't going to make headlines on the evening news, but it’s still worth paying attention to. To understand why this happened, we need to look at the bigger economic picture and what the Federal Reserve is up to.

Currently, after aggressive hikes to combat soaring inflation since 2022, the Fed seems to be in a “wait and see” mode. They cut rates three times in late 2024, which brought some initial optimism. However, the economy is sending mixed signals in 2025: inflation is still a bit stubborn, but economic growth is definitely slowing down. This puts the Fed in a tricky spot, as indicated by internal divisions within the Fed.

Here is an overview of the situation.

Factor	Current Status	Impact on Mortgage Rates
Federal Reserve Policy	Holding rates steady, but with internal debates	Creates uncertainty; potential for future cuts
Inflation (Core PCE)	~2.7%	Keeps upward pressure on rates
GDP Growth	~1.2% annualized	Puts downward pressure on rates
Unemployment Rate	4.5%	Puts downward pressure on rates

The drop in mortgage rates by 12 basis points is due to some of the downward pressures such as slowing growth. However, this number might go up soon.

A Look at Today's Mortgage Rates:

Here's a snapshot of where rates stand today, across different loan types. Notice that these are conforming loans, which means they meet specific criteria set by Fannie Mae and Freddie Mac (primarily loan size limitations).

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate	6.70%	down 0.13%	7.21%	down 0.07%
20-Year Fixed Rate	6.41%	down 0.05%	6.80%	down 0.13%
15-Year Fixed Rate	5.75%	down 0.13%	6.08%	down 0.09%
10-Year Fixed Rate	5.48%	down 0.26%	5.84%	down 0.28%
7-year ARM	7.08%	down 0.14%	7.59%	down 0.29%
5-year ARM	7.18%	down 0.36%	7.84%	down 0.07%

Source: Zillow

What Should You Do?

Keep a close eye on what the Fed says and does! Their September and December meetings are key dates to watch. If they signal further rate cuts, mortgage rates will likely follow. If you have rate above 7%, monitor these Fed decisions for potential opportunities.

30-Year vs. 15-Year Fixed Rate: Which is Right for You?

Choosing between a 30-year and a 15-year fixed-rate mortgage is a big decision and depends entirely on your financial situation and goals. While the 30-year FRM offers lower monthly payments, you'll pay significantly more interest over the life of the loan. The 15-year FRM, on the other hand, comes with higher monthly payments but saves you a ton of money in interest and allows you to build equity much faster.

Here's a quick comparison to help you decide:

Feature	30-Year Fixed	15-Year Fixed
Monthly Payment	Lower	Higher
Interest Paid	Higher	Lower
Equity Building	Slower	Faster
Interest Rate	Slightly Higher	Slightly Lower
Best For	Budget-conscious buyers	Building equity, saving on interest

For most people who cannot afford higher payments or need access to cash for other investments or home improvements (a.k.a. opportunity cost), 30-year FRM is the better solution.

Expert Opinions: Where Are Mortgage Rates Headed?

Predicting the future is always tricky, but here's what some experts are saying:

• Fannie Mae: Expects mortgage rates to end 2025 at 6.5% and 2026 at 6.1%. This is based on their forecast for moderate GDP growth.
• Mortgage Bankers Association (MBA): Projects mortgage rates to remain mostly unchanged through September 2025, ending the year close to 6.7% and being around 6.3% in 2026.
• Morgan Stanley: Home prices could decrease slightly amid increased housing supply. A slowing in U.S. gross domestic product (GDP) growth could take Treasury yields lower and mortgage rates with them, further helping affordability

My Take:

I think the experts are mostly right, with a bit of wiggle room. The key is what the Fed does and how inflation shakes out. If inflation remains stubborn, rates might stay higher for longer. But if the economy slows down more than expected, the Fed will likely cut rates, pushing mortgage rates down.

Ultimately, the best time to buy a home is when you're financially ready. While predicting the future is impossible, staying informed and working with a trusted mortgage professional will help you make the best decision for your situation.