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Mortgage Rates Predictions 2026 by Warren Buffett’s Berkshire Hathaway

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Wondering where mortgage rates are headed? If you're like me, you're probably watching the market like a hawk, trying to figure out the best time to buy or refinance. Warren Buffett's Berkshire Hathaway recently shared its U.S. Real Estate Market Forecast, and it sheds some light on what we might expect. Brace yourself: While immediate, dramatic relief isn't likely, there is cautious optimism for gradual improvement in 2026.

Mortgage Rates Predictions 2026 by Warren Buffett’s Berkshire Hathaway

Let's dive into the details and what this actually means for you.

Understanding the Current Uncertainty

Let me tell you, this year has been a rollercoaster. World events and all the financial market craziness have created a whole lot of uncertainty, especially when it comes to housing. And right now, according to the Berkshire Hathaway report, it all hinges on “wild cards” that could heavily influence how the year wraps up and what mortgage rate changes await us in 2026.

Danielle Hale, the chief economist at Realtor.com®, noticed rates dipped a bit from April to early May, which might have nudged pending home sales upward slightly. But then, bam! Rates started climbing again in mid-May.

The Experts Weigh In: When Will We See Relief?

The truth is, most experts aren't expecting any significant relief until 2026 or later. The forecast states, “meaningful relief may not arrive until 2026 or later, as mortgage interest rates are unlikely to decline.” A hard pill to swallow, I know. But, that doesn't mean we need to lose all hope.

Recent Rate Drops and the Fed's Role

There's some good news amid all this – mortgage interest rates have been slowly decreasing lately, even without any help from the Federal Reserve. As of August 7, 2025, the average rate on a 30-year fixed-rate mortgage was 6.63%, according to Freddie Mac. That's the lowest it has been since April!

Sam Khater, the chief economist at Freddie Mac, pointed out that lower rates boost what homebuyers can afford. And he's right! According to him, you might be able to save thousands of dollars by shopping around for quotes from different lenders.

The Federal Reserve Open Market Committee (FOMC) decided to keep interest rates steady, which could pave the way for a potential policy shift as early as the fall. I'm not an economist, but I see this as a positive sign.

Cautious Optimism for 2026

Hannah Jones, a senior economic research analyst at Realtor.com, makes a pretty valid point: mortgage rates have been falling in recent weeks, and the forecast leans towards cautious optimism for 2026. The magic words are “cautious optimism,” meaning we should manage our expectations.

Many analysts expect the Federal Reserve to start cutting rates towards the end of 2025, followed by more cuts in 2026. This is the potential relief we're all looking for.

Forecast Breakdown: Who's Saying What?

Here's a quick overview of what the major players are predicting:

  • Fannie Mae: The most optimistic of the bunch, projecting a rate of 6.1% by the end of 2025 and 5.8% in 2026.
  • National Association of Home Builders (NAHB): Expects the 30-year fixed-rate mortgage to stay in the mid-6% range through the end of 2025, dipping below 6% in late 2026.
  • Mortgage Bankers Association (MBA): Forecasts average rates of 6.7% in Q3 2025, easing slightly to 6.6% by the end of the year and 6.5% in Q1 2026.

To put it into a cleaner perspective, here is a summary of the forecast:

Organization End of 2025 Rate 2026 Rate
Fannie Mae 6.1% 5.8%
National Association of Home Builders Mid-6% range Below 6% (late 2026)
Mortgage Bankers Association 6.6% 6.5% (Q1)

Hannah Jones also wisely suggests that if the Fed decides to cut rates gradually, mortgage rates could slowly decline, making homes more affordable for some buyers. But she also notes that inflation and the market conditions will be the real factors of how much these Fed cuts translate to lowering borrowing costs.

What's Happening with Home Inventory?

The NAHB also pointed out that persistent interest rates and economic uncertainty caused a 13.7% drop in new home sales in May, based on signed purchase contracts.

While home inventory has gone up to a 9.8-month supply, 37% of builders are cutting prices. This is great for buyers. I think the increase in inventory means finding the right home could become easier!

As Realtor.com has found, the pace of sales slowed down in July. It took 58 days to sell a home—seven days longer than the previous year. Prices were reduced for 20.6% of listings in July.

My Takeaway for Homebuyers

Honestly, I think Warren Buffett's Berkshire Hathaway‘s forecast confirms what many of us already suspected: no sudden drop is in sight. You might need to adjust your expectations.

With that being said, for homebuyers, the shift will most likely be modest instead of dramatic. So, it's better to plan your purchases around gradual rate relief rather than waiting for a sharp drop. In other words, don't try to time the market perfectly because it's pretty unpredictable.

Key Takeaways

  • Immediate and significant relief is unlikely until 2026 or later.
  • Rates have decreased recently, which could boost your purchasing power if you find a home you like.
  • Keep a close eye on what the Fed is doing – rate cuts could lead to lower mortgage rates, but this also depends on broader conditions such as inflation.
  • Home inventory is rising, and builders are cutting prices, so you might have an advantage if you are currently buying a home.

What to do Now

  1. Shop Around: Don't just go with the first lender you find. Get quotes from multiple lenders to see where you can get the best rate. Even a small difference can save you thousands over the life of a loan.
  2. Improve Your Credit Score: The better your credit score, the better the interest rate you'll qualify for.
  3. Save for a Larger Down Payment: A larger down payment can lower your loan amount and potentially your interest rate.
  4. Consider Different Loan Types: Look into both fixed-rate and adjustable-rate mortgages to see which one best fits your financial situation and risk tolerance.
  5. Talk to a Financial Advisor: A financial advisor can help you assess your financial situation and determine the best course of action for your homebuying goals.

Final Thoughts:

While the Berkshire Hathaway report throws some cold water on immediate, drastic rate drops, it also offers a dose of cautious optimism. In the meantime, do your homework, and position yourself to pounce when the opportunity strikes. Real estate depends on the real-world and market conditions, so planning ahead is key.

Capitalize Amid Rising Mortgage Rates

With mortgage rates expected to remain high in 2025, it’s more important than ever to focus on strategic real estate investments that offer stability and passive income.

Norada delivers turnkey rental properties in resilient markets—helping you build steady cash flow and protect your wealth from borrowing cost volatility.

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Mortgage Rates Today: 5-Year ARM Goes Down by 6 Basis Points – August 19, 2025

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If you are in the market for a new home or looking to refinance, understanding the current mortgage rate is very important. As of today, August 19, 2025, the national average 5-year ARM (Adjustable-Rate Mortgage) has decreased by 6 basis points, settling at 7.27%, according to data from Zillow. While this might seem like a small change, it signals shifts in the market that I will discuss in this article. Let's break down what it means for you and how the Federal Reserve's decisions are playing a significant role.

Mortgage Rates Today: 5-Year ARM Goes Down by 6 Basis Points – August 19, 2025

A Snapshot of Today's Mortgage Rates

First, here’s a quick overview of how different mortgage types are performing right now:

  • 30-Year Fixed: 6.69% (down 1 basis point from yesterday)
  • 15-Year Fixed: 5.79% (down 2 basis point from yesterday)
  • 5-Year ARM: 7.27% (down 6 basis points from yesterday)

Here’s a more detailed look at the conforming loan rates:

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate 6.69 % up0.03 % 7.16 % up0.04 %
20-Year Fixed Rate 6.43 % down0.24 % 6.90 % down0.08 %
15-Year Fixed Rate 5.79 % up0.02 % 6.09 % up0.02 %
10-Year Fixed Rate 5.48 % 0.00 % 5.84 % 0.00 %
7-year ARM 7.45 % down0.08 % 8.12 % up0.12 %
5-year ARM 7.27 % up0.03 % 7.82 % up0.01 %
3-year ARM — 0.00 % — 0.00 %

Source: Zillow – August 19, 2025

Why Focus on ARMs?

Adjustable-Rate Mortgages (ARMs) can be appealing, especially when rates for fixed mortgages are high. The initial rate on an ARM is often lower than a fixed-rate mortgage. In today's market, where the 30-year fixed rate sits at 6.69%, a 5-year ARM at 7.27% may not seem like a deal initially, but understanding the broader economic context is crucial.

The reason I believe ARM rates are really important right now: They directly reflect market expectations about near-term interest rate movements, influenced so much by meetings of the Fed. The small decrease we're seeing today could hint at bigger changes on the horizon.

The Federal Reserve's Influence: A Deep Dive

To really understand where mortgage rates are headed, we need to talk about the Federal Reserve (the Fed). Their monetary policy decisions are what mainly drive the trends in these rates.

From 2021 to 2023, the Fed was in full response mode, with actions varying from keeping mortgage rates at historic lows during the pandemic by purchasing bonds, to then switching gears and combatting inflation and aggressively raising the federal funds rate by 5.25 percentage points.

In late 2024, the Fed started to pivot, cutting rates three times between September and December. This decrease was one percentage point, putting the federal funds rate between 4.25% and 4.5%. Since those end of 2024 cuts, we've had a pause through July 2025, while they took additional measures to consider the economic impact of these decisions.

Economic Factors at Play in 2025

As of today, August 19, 2025, we're seeing a mix of economic factors that are influencing the Fed's decisions:

  • Inflation is Stubborn: Core PCE (Personal Consumption Expenditures) remains around 2.7%, and new tariffs could add to the pressure.
  • Growth is Slowing: GDP growth has slowed down, and unemployment has increased to 4.2%. We're also seeing fewer new jobs being created.

Because of these factors, there's a ton of expectation that the Fed will cut rates at their upcoming September 16-17 meeting. You can see the market signals point to a high probability (85-95%) of this happening, based on tools like the CME FedWatch Tool.

Why a September Rate Cut Is Likely

There are three things I think are really pointing toward the Fed making a rate cut next month:

  • Cooling Inflation: The CPI (Consumer Price Index) has come down to 2.7%, which is getting closer to the Fed's target.
  • Labor Market Weakening: With unemployment at 4.2% and fewer new jobs, the Fed has reason to step in and support the economy.
  • Predicted Slowdown: Economic forecasts are suggesting a slowdown, which just makes a preemptive stimulus look more necessary.

Keep an eye out for Fed Chair Jerome Powell's speech at the Jackson Hole Economic Symposium on August 22. He's likely to drop more hints about what the Fed will do in September.

How a Rate Cut Will Impact Mortgage Rates

The mortgage rates on 30-year fixed mortgages has hovered close to 6.8% through mid-2025. A cut in September is expected to push rates lower. I believe this will reduce borrowing costs across the board, encouraging business investment and leading to significant movements in both stock and bond markets.

The Fed's own projections from June suggested two rate cuts in 2025. And with a September cut, it could potentially bring mortgage rates down near 6% by the end of the year.

What to Watch Out For

Even though the probability is high, it's important to remember that the Fed's decision isn't guaranteed. If inflation stays higher than expected or the economy shows surprising strength, things could change.

Key Dates and Scenarios

Here are some important dates to keep in mind:

  • September 16-17 Meeting: This is when the Fed will likely make a rate cut. They'll also release updated economic forecasts.
  • December Meeting: This could be when the Fed makes its second rate cut of 2025.

Looking further ahead, the Fed anticipates slowly lowering rates, with the goal of getting them to around 2.25%-2.5% by 2027.

What This Means for You

Here’s how these trends might affect different people:

  • Current Buyers: Although rates are still high, keep an eye on the September meeting. It could bring some relief.
  • Refinancers: If your rate is above 7%, pay close attention to what happens in September. You might be able to refinance at a lower rate.
  • Investors: The bond markets are sensitive to what the Fed says and does. If there's a confirmed rate cut, bond yields will likely go down.

Final Thoughts: The small decrease in the 5-year ARM rate today is just one piece of a much larger puzzle. By keeping an eye on the Fed's actions and understanding the economic factors at play, you can make smarter decisions about your mortgage and financial future.

Capitalize on ARM Rates Before They Rise Even Higher

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

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

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Jerome Powell and the Fed: 80%+ Chance of Interest Rate Cut in September

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The financial world is buzzing with anticipation. Is the Federal Reserve, under the watchful eye of Chair Jerome Powell, gearing up for an interest rate cut next month? Based on the latest market signals, it seems incredibly likely, with odds pointing to a strong 80%+ chance of a rate cut in September. This isn't just a small possibility; it's a strong possibility that could ripple through your wallet and the economy in big ways.

As we head into the crucial September 16-17 meeting of the Federal Open Market Committee (FOMC), every economic report, every speech from Fed officials, and every tick on financial markets futures is being dissected. The original question about an 80% chance is actually a bit conservative now.

Looking at the data as of mid-August 2025, the probabilities are even higher, often landing between a solid 83% and a very convincing 94% for at least a quarter-percentage-point (0.25%) reduction. Powell, while influential, doesn't call the shots alone; the FOMC makes the decision as a group. But his words and the Fed's direction heavily influence these outcomes.

Let's break down what's really going on with these interest rates, the economic signs pointing towards a cut, how we can actually measure these probabilities, what Powell has been saying, and what this all means for you. I’ll share some of my own thoughts and experiences to give you a deeper understanding of this complex but important topic.

Jerome Powell and the Fed: 80%+ Chance of Interest Rate Cut in September

Federal Reserve Data Visualization Dashboard

Federal Reserve Data Visualization Dashboard

Historical Federal Funds Rate (2020-2025)

Key Events: 🔴 First Hike (Mar 2022) | 🔴 Peak Rate (Jul 2023) | 🔴 First Cut (Sep 2024)
4.33%
Current Fed Rate
August 2025
2.7%
Latest Inflation
July 2025
84%
Rate Cut Consensus
September 2025

Key Insights

  • The Fed raised rates aggressively from near-zero to 5.5% between March 2022 and July 2023
  • Rate cuts began in September 2024, bringing rates down to current 4.33% level
  • Inflation has steadily declined to 2.7%, approaching the Fed's 2% target
  • Unemployment has risen moderately to 4.2%, signaling some labor market softening
  • Strong market consensus (80%+) expects another rate cut in September 2025
Created by Norada Real Estate Investments

The Fed's Balancing Act: Understanding Interest Rates

First off, what exactly is the Fed doing with interest rates? Think of the federal funds rate as the main thermostat for the economy. It's the rate banks charge each other for overnight loans. When the Fed adjusts this rate, it affects borrowing costs everywhere – from the mortgage on your house and the interest on your car loan to how much it costs businesses to borrow money to expand.

The FOMC, the Fed's decision-making body, meets eight times a year to look at all the economic information and decide whether to raise, lower, or keep rates the same. For a long time, after the COVID-19 pandemic, rates were pretty much at zero to help the economy bounce back. But then, inflation started to climb really high.

To fight that, the Fed started raising rates aggressively in March 2022. They kept going until they hit a peak of 5.25%-5.50% in July 2023. Since then, they’ve been gradually bringing rates down, and as of mid-August 2025, the target range is 4.25%-4.50%. This slow cooling reflects progress on inflation but also a careful watch for any signs of the economy slowing down too much.

Generally, the Fed cuts rates when inflation is under control and they worry about people losing jobs or businesses struggling. They raise rates to cool down an economy that's getting too hot, which can lead to inflation.

Historically, when the Fed starts cutting rates, they often make bigger moves, maybe 50 to 75 basis points at a time. But today, the talk is mostly about a smaller 25-basis-point cut to bring the rate down to 4.00%-4.25%. Some analysts are even talking about the possibility of a larger 50-basis-point cut if the economic data shows a significant slowdown.

The Economic Clues: Why a Cut Looks Likely

So, what's an economy analyst like me seeing that makes a September cut seem so probable? The U.S. economy in mid-2025 presents a bit of a mixed bag, which is exactly the kind of situation where the Fed might decide to lower rates.

  • Inflation is Cooling, But Not Gone: The Consumer Price Index (CPI), which is how we measure inflation, rose by 2.7% year-over-year in July 2025. That’s the same as June, but it's still higher than it was earlier in the year, and notably above the Fed's target of 2%. Core inflation, which strips out food and energy prices, was 3.1%. While this is much lower than the highs we saw in 2022 (over 6%), it's still a bit persistent. This moderate inflation, however, shows that the Fed's previous rate hikes are working, and keeping rates too high might slow things down more than necessary.
  • Jobs Market Shows Some Weakness: The unemployment rate nudged up to 4.2% in July from 4.1% in June. It’s been hovering in that 4.0%-4.2% range for a while. More importantly, job growth, which is how many new jobs are created each month, slowed down significantly. We only saw 114,000 nonfarm payrolls added in July, which was less than many people expected. This slight cooling in the job market is something the Fed watches very closely because one of its main goals is to have as many people employed as possible. If unemployment starts to tick up more consistently, it’s a strong signal for the Fed to ease up on rates.
  • Economic Growth is Slowing Down: The overall economy, measured by Gross Domestic Product (GDP), grew at a rate of 3.0% in the second quarter of 2025. That’s actually pretty good and better than the first quarter. However, when you look at forecasts for the rest of 2025 and into 2026, most experts predict growth will slow down to around 1.5%. This anticipated slowdown is another reason why the Fed might consider cutting rates now, to help keep the economy moving along smoothly – what they call a “soft landing.”

Taken together, these economic signs suggest a scenario where inflation is getting closer to the target, and the economy is slowing without necessarily falling into a recession. But you can see how volatile these numbers can be; that weaker jobs report in July really boosted the chances of a rate cut.

Reading the Tea Leaves: Market Predictions and Probability Tools

That “80%” figure you might have heard is definitely in the ballpark, but as I mentioned, it’s actually on the lower end of what the markets are showing now. The best way to get a real-time look at what the markets expect is by using tools like the CME FedWatch Tool. This tool looks at futures contracts for the federal funds rate and basically shows how traders are betting on future rate decisions.

Here’s a snapshot of what the probabilities looked like around mid-August 2025:

Source/DateProbability of 25bp CutProbability of 50bp CutProbability of No Change
CME FedWatch (Aug 19)82.9%17.1%0%
Bloomberg Analysts (Aug 18)90%+N/A<10%
Investing.com Fed Monitor (Aug 13)91.8%8.2%0%
Barron's (Aug 13)90.9%N/A9.1%
Growbeansprout (Aug 17)83.4%N/A16.6%

(Note: Probabilities are aggregated and may not sum to exactly 100% across all outcomes in every single reporting instance due to how different sources round and present data.)

As you can see, many sources are putting the odds of a cut at 90% or higher. This consensus is a strong signal, but it’s crucial to remember that these are just probabilities. They can change day by day based on new economic reports.

You see these numbers reflected all over social media, too, with people discussing predictions and linking them to how other markets, like cryptocurrency or gold, might react.

What Jerome Powell is Saying (and What It Means)

Jerome Powell, as the head of the Fed, carefully chooses his words. He’s emphasized that the Fed is “data-dependent,” meaning they base their decisions on the latest economic information. In the Fed's July 30, 2025, statement, he shared that they were keeping rates at the current 4.25%-4.50% level while they “assess incoming data, the evolving outlook, and the balance of risks.”

He pointed out that while economic activity has been expanding at a solid pace, inflation is still “elevated,” and the job market has “shown signs of improving.” Crucially, he reiterated the Fed's commitment to getting inflation down to 2% and supporting maximum employment. He also made it clear that the Fed is “prepared to adjust” its policy if they see new risks.

Powell's upcoming appearance at the Jackson Hole Economic Symposium on August 22, 2025, will be closely watched for any hints about the Fed's thinking. There’s always speculation around these events, from thoughts on future rate cuts to even discussions about his own position at the Fed. While he hasn't said a cut is guaranteed, he's certainly not ruling it out. He’s been pushing back against expectations for very rapid interest rate cuts, suggesting a cautious approach.

Weighing the Risks and What Comes Next

Even with such high probabilities, there are always things that could change the Fed's mind. If inflation suddenly becomes “sticky” again – maybe because of things like new tariffs on imported goods driving prices up – the Fed might delay a cut. Or, if upcoming economic data surprises everyone by being much stronger than expected, they might hold off.

Some people still believe the odds are lower if the economy remains strong, citing times in the past when markets were overly optimistic about rate cuts.

So, what does a rate cut – or no cut – mean?

  • For Consumers: Lower interest rates mean it will be cheaper to borrow money. This could mean lower monthly payments on mortgages if you’re looking to refinance or buy a new home, and potentially lower interest rates on car loans and credit cards.
  • For Businesses: More affordable borrowing means businesses might find it easier to invest in new equipment, hire more people, or expand their operations.
  • For Investors: When interest rates go down, investments like stocks and other riskier assets often become more attractive, potentially leading to higher prices. On the flip side, a rate cut can make existing bonds worth less if their fixed interest rate is now lower than new bonds being issued. A cut can also make the U.S. dollar weaker against other currencies. If the Fed doesn't cut rates, it might mean they are more concerned about inflation or economic strength, which could make the stock market a bit nervous.

The Bottom Line

Based on what I'm seeing in the economic data and how the markets are reacting, the chance of the Federal Reserve cutting interest rates in September 2025 is very high, likely in the 85-95% range. This is driven by inflation that's moving in the right direction, a job market that's showing some signs of cooling, and a general expectation that economic growth will slow down.

However, the Fed’s core principle is to be “data-dependent,” so nothing is set in stone until the FOMC officially makes its decision. Always keep an eye on Jerome Powell's comments and any new economic reports that come out between now and the September meeting. These will be the key factors that could either confirm or change the current expectations.

Position Your Portfolio Ahead of the Fed’s Next Move

The Federal Reserve’s next rate decision could shape real estate returns through the rest of 2025. Whether or not a rate cut happens, smart investors are acting now.

Norada Real Estate helps you secure cash-flowing properties in stable markets—shielding your investments from volatility and interest rate swings.

HOT NEW LISTINGS JUST ADDED!

Talk to a Norada investment counselor today (No Obligation):

(800) 611-3060

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Interest Rate Forecast for September 2025: Will Fed Cut Rates?

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As we look ahead to the Federal Reserve's meeting on September 16-17, 2025, everyone's asking the same question: Will the Fed cut interest rates? Considering the fluctuating economic data, I believe it's likely the Fed will cut rates by 0.25% at the September meeting. However, the final decision will depend on key data points released before the meeting. Let's dive deep into the factors influencing this pivotal decision.

Interest Rate Forecast for September 2025: Will Fed Cut Rates?

Where We Stand Right Now

The Federal Reserve has kept the interest rate between 4.25%-4.50% since December 2024. At their July 30, 2025, meeting, they decided to hold steady. At that time, five consecutive meetings had passed without any rate changes. Then, some fresh data came out that made everyone rethink their expectations.

After a disappointing jobs report in July 2025, the chances of a rate cut in September shot up. Before the report, the market predicted only a 37% chance of a cut, but after the report the prediction went up to over 80% according to the CME FedWatch tool. That's a big jump which shows how sensitive the market is to new data.

What's Driving the Fed's Decision?

The economy is sending mixed signals, making the Fed's job much harder. Let's break them down:

  • Inflation: Inflation is still above the Fed's target of 2%. In June 2025, it was at 2.7%, up from 2.4% in May. Core inflation, which excludes food and energy, was at 2.9%. The increased tariffs, with average U.S. tariff rates at about 18.4% in July 2025, are contributing to these higher prices.
  • Labor Market: The labor market seems to be cooling off. The unemployment rate went up to 4.2% in July, up from 4.1% in June. Also, job growth has slowed. More concerning is that past months' job numbers have been adjusted downwards. May and June job gains were revised down by 258,000 jobs!

Here’s a quick summary:

Indicator June 2025 July 2025
Inflation (YoY) 2.4% 2.7%
Core Inflation N/A 2.9%
Unemployment Rate 4.1% 4.2%

Tensions Within the Fed

At the Federal Reserve's July 30th meeting, there was some disagreement. Two governors, Michelle Bowman and Christopher Waller, voted for a rate cut of 0.25%. It had been since 1993 that multiple Fed governors have voted againt the majority position, which shows how much pressure there is to start lowering rates.

Jerome Powell, the Fed Chair, played it cool and mentioned that no decision was made about September. He stressed that the Fed wanted to see more data before making any move. He also said the Fed has to balance two things: Cutting rates too soon, which could cause inflation to rise again, versus waiting too long, which could hurt the job market.

The Tariff Situation

It's undeniable that tariffs are causing some serious headaches. Chair Powell admitted that they have made some goods more expensive. The full effect is still unclear. It's a delicate balancing act for the Fed. They see some tariff-related price increases as temporary.

However, the uncertainty around future tariff policy can hurt business confidence and investment decisions. This high level of doubt is one of the factors the Fed is considering.

Economic Growth and Consumer Spending

Even though the job market is shaky, the U.S. economy grew at a 3.0% rate in the second quarter of 2025. However, this growth was mostly due to trade and lower imports, not strong demand in the U.S.

Domestic final sales only grew by 1.2% in the second quarter, which is the slowest since late 2022. This gives a clearer sense of the economy's momentum: things are slowing down.

Consumer spending, which is a significant factor for economic growth, has also slowed, growing by just 1.4% in the second quarter. This is due to higher interest rates and ongoing inflation affecting people's spending power.

What Wall Street Thinks

Financial markets haven't been able to make up their minds. After Powell's cautious comments in July, the dollar became stronger, and Treasury yields increased. People thought the Fed would not be cutting rates soon, but the weak jobs report changed everything. Market participants now expect more aggressive rate cuts.

Big Wall Street firms have changed their forecasts accordingly. Goldman Sachs now predicts three rate cuts in 2025 like what I've indicated, and expects the federal funds rate to be between 3.0%-3.25% by the end of the year. This is pretty substantial.

BlackRock's Rick Rieder even wondered if the Fed might make a big move and cut rates by 0.50% in September if the job market continues to weaken.

The Global View

What the Fed decides greatly influences global markets and other central banks. Many foreign central banks have already started cutting rates. The Fed's actions will likely affect how quickly other central banks make their own changes.

If the Fed starts slashing interest rates, the U.S. dollar, which has been strong, may weaken. This could affect emerging market economies and trade around the world.

Uncertainty Makes Decisions Tough

The Economic Policy Uncertainty Index hit a high of 243.7 in July 2025. This shows how difficult it is for businesses and policymakers to plan for the future.

Fed officials have said that their forecasts are dispersed. The June 2025 Summary of Economic Projections showed that FOMC participants have different ideas about where interest rates should go.

What About Jobs and Inflation?

The job situation is crucial for the Fed's decision, and the Job Openings and Labor Turnover Survey (JOLTS) has shown fewer jobs and lower hiring rates.

Although inflation has come down from its peak, core inflation remains a concern. Models from the Federal Reserve Bank of Cleveland predict that prices will continue to rise in the near future, potentially reaching 2.9% by August 2025.

The Fed needs to figure out whether price increases are temporary due to tariffs or if they are more permanent.

My Interest Rate Predictions for Sept 2025: A Balancing Act

The Federal Reserve is approaching a crossroads. Based on all the evidence, I believe the Fed will likely cut rates in September. Right now, markets estimate around an 80% chance of a 0.25% reduction.

Will the Fed Cut Rates in September 2025
Evolution of market expectations for Federal Reserve rate cuts in September 2025 based on CME FedWatch tool data

The Fed's next steps will depend on how the economy performs, especially concerning the job market and inflation. I think the challenge will be to figure out recent labor market problems are just a short-term glitch or a sign of something more serious. Though the Fed has some wiggle room to maneuver, the margin for error is small. Given that current unprecedented economic conditions, the September 2025 FOMC meeting could set the tone for monetary policy.

Position Your Portfolio Ahead of the Fed’s Next Move

The Federal Reserve’s next rate decision could shape real estate returns through the rest of 2025. Whether or not a rate cut happens, smart investors are acting now.

Norada Real Estate helps you secure cash-flowing properties in stable markets—shielding your investments from volatility and interest rate swings.

HOT NEW LISTINGS JUST ADDED!

Talk to a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

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Hottest Housing Markets: Top ZIP Codes for 2025 Revealed

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If you're trying to figure out where the hottest housing markets are right now, the answer is often found in the ZIP codes. The following top 10 ZIP codes in the U.S. showcase where buyer demand is highest and homes are selling the fastest. For 2025, the spotlight shines brightly on Beverly, Massachusetts (01915), along with other areas primarily in the Northeast and Midwest, highlighting a trend of buyers seeking value, location, and lifestyle.

Hottest Housing Markets: Top ZIP Codes for 2025 Revealed

Each year, I eagerly anticipate the Realtor.com's Hottest ZIP Codes report to get a pulse on the real estate market. It provides some serious insight into where people want to live and what they're prioritizing when buying a home. This year's report is especially interesting because it underscores how buyers are adapting to higher mortgage rates and affordability challenges. I've always believed that people are smart about where they put their money when it comes to real estate, and these ZIP codes tell a story of buyers strategically seeking value, even in competitive markets.

How Are The “Hottest ZIP Codes” Determined?

Realtor.com uses a unique methodology to identify these sought-after areas. I like how it combines two key factors so it is a well-rounded process:

  • Market Demand: Measured by the number of unique viewers per property on Realtor.com. The more people looking at a property, the hotter the market.
  • Pace of the Market: Measured by how long a listing stays active on Realtor.com. The faster homes sell, the more competitive the ZIP code becomes.

Basically, the hottest ZIP codes have high buyer interest (lots of views) and quick sales (homes don't stay on the market long). The below table lists the top 10 hottest ZIP codes of 2025.

Rank ZIP Code City
1 01915 Beverly, MA
2 08053 Marlton, NJ
3 01453 Leominster, MA
4 63021 Ballwin, MO
5 07470 Wayne, NJ
6 44149 Strongsville, OH
7 06611 Trumbull, CT
8 02864 Cumberland, RI
9 06074 South Windsor, CT
10 43209 Bexley, OH

Key Trends & Takeaways from the List

Here's what I found most interesting about this year's hottest ZIP codes report:

  • Northeast and Midwest Domination: For the third year in a row, the South and West are absent from the list. The Northeast and Midwest continue to see high demand and limited housing supply.
  • Suburban Appeal: The hottest ZIP codes are largely in desirable suburban areas, offering a slower pace of life without sacrificing access to major economic hubs.
  • Homes are Flying Off the (Virtual) Shelf: Listings in the top ten ZIPs are seeing 3.3 to 5.2 times as many views as the average U.S. property, and homes are selling 30–42 days faster.
  • Tight Inventory: Inventory is way down in these hot markets, almost 59% below pre-pandemic levels. This means more competition and faster sales for the properties that are listed.

The Top 10 Hottest Housing Markets by ZIP Code in 2025

Let's dive a little deeper into each of these top 10 ZIP codes and see what makes them so desirable:

  1. Beverly, MA (01915)
    • Metro Area: Boston-Cambridge-Newton, MA-NH
    • The most popular ZIP code in the U.S. for 2025.
    • Median Listing Price: $746,000
    • Days on Market: 16
    • Viewers per Property vs. US Average: 4.6x
    • Why it's hot: Good schools, coastal charm, and commuter rail access to Boston make Beverly a desirable option for those seeking a balance between suburban living and city access.
  2. Marlton, NJ (08053)
    • Metro Area: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
    • Median Listing Price: $495,000
    • Days on Market: 17
    • Viewers per Property vs. US Average: 3.9x
    • Why it's hot: Marlton offers a more affordable option compared to other areas in the Philadelphia metro, with good schools and a convenient location.
  3. Leominster, MA (01453)
    • Metro Area: Worcester, MA
    • Median Listing Price: $441,000
    • Days on Market: 18
    • Viewers per Property vs. US Average: 4.0x
    • Why it's hot: Leominster attracts buyers seeking a lower cost of living compared to Boston, while still having access to the city's amenities. Leominster is also well connected to the more popular Zip code of Boston.
  4. Ballwin, MO (63021)
    • Metro Area: St. Louis, MO-IL
    • Median Listing Price: $350,000
    • Days on Market: 22
    • Viewers per Property vs. US Average: 3.8x
    • Why it's hot: Good schools and a family-friendly atmosphere make Ballwin a popular choice in the St. Louis metro.
  5. Wayne, NJ (07470)
    • Metro Area: New York-Newark-Jersey City, NY-NJ
    • Median Listing Price: $664,000
    • Days on Market: 22
    • Viewers per Property vs. US Average: 3.3x
    • Why it's hot: Wayne offers a suburban lifestyle with a relatively shorter commute to New York City, making it a desirable option for those working in the city. This makes living easier and lifestyle, flexible.
  6. Strongsville, OH (44149)
    • Metro Area: Cleveland, OH
    • Median Listing Price: $423,000
    • Days on Market: 25
    • Viewers per Property vs. US Average: 5.2x
    • Why it's hot: Strongsville provides a family-friendly” environment with strong schools and access to the amenities of Cleveland.
  7. Trumbull, CT (06611)
    • Metro Area: Bridgeport-Stamford-Danbury, CT
    • Median Listing Price: $666,000
    • Days on Market: 25
    • Viewers per Property vs. US Average: 5.1x
    • Why it's hot: Trumbull balances suburban living with good schools and a reasonable commute to New York City.
  8. Cumberland, RI (02864)
    • Metro Area: Providence-Warwick, RI-MA
    • Median Listing Price: $534,000
    • Days on Market: 26
    • Viewers per Property vs. US Average: 3.6x
    • Why it's hot: Cumberland offers more affordable housing compared to Boston, with a good location near the city of Providence, making it especially suitable for renters.
  9. South Windsor, CT (06074)
    • Metro Area: Hartford-West Hartford-East Hartford, CT
    • Median Listing Price: $406,000
    • Days on Market: 27
    • Viewers per Property vs. US Average: 5.0x
    • Why it's hot: Good schools and a family-oriented community make South Windsor an attractive choice for those seeking a suburban lifestyle near Hartford.
  10. Bexley, OH (43209)
    • Metro Area: Columbus, OH
    • Median Listing Price: $439,000
    • Days on Market: 25
    • Viewers per Property vs. US Average: 3.4x
    • Why it's hot: Bexley is known for its historic charm, walkable streets, and good schools, attracting buyers looking for something special in Columbus. It also offers a small-town feel with easy access to metropolitan amenities.

The Value Proposition: What Buyers Want

It's interesting to me that even with higher mortgage rates, people are still willing to jump into the housing market in these areas. Why is that? Well, this year's hottest ZIP codes highlight what buyers are prioritizing:

  • Value for Money: Many buyers are looking for areas where they can get more house for their money compared to the surrounding metro area.
  • Suburban Lifestyle with Urban Access: People want the space and safety of the suburbs, but they still want to be able to easily get to the city for work or entertainment.
  • Good Schools: This is always a top priority for families with children.
  • Community: People want to live in neighborhoods where they feel connected to their neighbors and have a sense of belonging.

Big-City Buyers Seeking Suburban Appeal

It's also worth noting that a lot of the interest in these hottest ZIP codes is coming from people who already live in big cities. Buyers from metros like New York, Boston, and Washington, D.C., are looking to escape the high costs and fast pace of urban life, without completely giving up access to those cities. As someone who has lived in both urban and suburban areas, I completely understand this desire!

  • New York City was the top out-of-metro source in 3 of the mentioned ZIP codes.
  • Boston was the top out-of-metro source in 4 of the mentioned ZIP codes
  • Washington, D.C. was the top out-of-metro source in 2 of the mentioned ZIP codes.

These people on average earn 50% more than the national median, making them highly competitive.

Who are these Buyers?

The buyers in the areas with hottest housing markets also share a few common characteristics:

  • Higher-Income Households: The average household income in these ZIPs is around $114,000, much higher than the national average.
  • Good Credit Scores: The average credit score in these areas is 759, compared to 748 nationwide.
  • Larger Down Payments: Buyers in these ZIPs are putting down more money on their homes, likely to lower their monthly payments in this high-interest-rate environment.
  • Established Homeowners: The average age of homeowners in these areas is 56, older than the national average, suggesting more experience and financial stability.

What Does This Mean For You?

Whether you're a buyer or a seller, understanding these trends can help you make informed decisions.

  • For Buyers: If you're looking to buy in one of these hottest ZIP codes, be prepared for competition. Get pre-approved for a mortgage, work with a knowledgeable real estate agent, and be ready to move quickly.
  • For Sellers: If you're selling in one of these areas, you're in a good position. Work with an experienced agent who can help you price your home competitively and market it effectively to attract the most offers.

Final Thoughts

The hottest housing markets are always changing, but some things remain constant. People want a good quality of life, a convenient location, and a sense of community. If you can find a ZIP code that offers those things, you're likely to find a place where homes are selling quickly and prices are holding steady.

While this report gives us a snapshot of the hottest markets right now, it's always important to do your own research and consider your individual needs and priorities when making real estate decisions. I encourage you to explore these ZIP codes and others, talk to local residents and agents, and see if any of these areas might be a good fit for you.

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When Will Mortgage Rates Go Down to 3% or 2% Again?

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Many of us remember the days of super-low mortgage rates, when you could snag a 30-year fixed rate around 2% or 3%. Those days felt amazing, didn't they? But times have changed. So, will the mortgage rates drop to 2% or 3% rates again? The short answer is: it's highly unlikely, at least not anytime soon. While the average 30-year U.S. mortgage rate is fluctuating, dropping to its lowest level since October at 6.58%, we're a long way off the historic lows reached during the pandemic. Let's dive into why those amazing rates were a bit of an anomaly and what the future likely holds for homebuyers.

When Will Mortgage Rates Go Down to 3% or 2% Again?

Looking Back: How Rates Got So Low

To figure out where we're going, we need to understand where we've been. Mortgage rates have always danced to the tune of the economy, bouncing up and down based on things like inflation, how the Federal Reserve acts, and even global events.

  • The Bad Old Days: 1970s and 80s. Imagine paying 18% on your mortgage! That's what folks faced when inflation went wild. The Fed had to slam on the brakes hard to get things under control.
  • The Gradual Slide: 1990s and 2000s. Things calmed down, and rates slowly dropped. Then came the 2008 financial crisis. To help the economy, the Fed cut rates and started buying bonds. This pumped money into the system.
  • The Pandemic Plunge: 2020-2021. The Fed went all-in to fight the economic impact of COVID-19. They slashed rates to almost zero and bought even more bonds. This sent mortgage rates crashing. We saw that historic low of around 2.65%!

It was like a shot of adrenaline for the housing market. Everyone was buying! Prices went through the roof, and people were saving tons of money by refinancing. But, like all good things, it couldn't last forever.

Where Are We Now? (August 2025)

Fast forward to today. The average 30-year fixed rate is around 6.58%. That's a big jump from the 2% to 3% range. While we've seen that decline to it's lowest since October, rates are still twice as high as they were during the pandemic. What happened?

  • Inflation Strikes Back. As the economy recovered, inflation started to rise. All that government stimulus and supply chain problems made things more expensive. The Fed had to respond.
  • The Fed Gets Tough. To fight inflation, the Fed started raising the federal funds rate. This rate influences other interest rates, including mortgage rates. They also stopped buying bonds.

This chart shows how rates have changed over time:

Year Average 30-Year Fixed Rate (%)
1981 (Peak) 18+
2000 8+
2010 5+
2021 (Low) 2.65
2023 6.8
Today (Aug 2025) 6.58

What's Driving Mortgage Rates Now?

It's not just the Fed's actions. Several things work together to push mortgage rates up or down:

  1. The Federal Reserve (Again): The Fed controls the federal funds rate, which influences short-term rates. If the Fed suggests upcoming rate cuts, it can signal future easing, but this depends on managing inflation risks.
  2. Inflation: Keeping an eye on inflation is critical. If inflation stays high, rates are less likely to fall significantly. PCE inflation has been projected at 3.0% for 2025, which is down but still above the Fed's target.
  3. Economic Growth and Bond Yields: Economic growth impacts Treasury yields. Strong growth can push yields higher, which then translates to higher mortgage rates.
  4. Global Events: Trade wars and political uncertainty can also impact rates.

What the Experts Say

I've been following this stuff for a while, and most experts don't think we'll see those ultra-low rates again anytime soon. I agree with them. Unless there's a major economic disaster, it's unlikely we'd see a return to rates below 4%.

  • Consensus View: Most economists believe rates will stay above 6% for a while, possibly easing to 5-6% if inflation cools off.
  • Possible Scenarios: If the economy slows down a lot, the Fed might cut rates faster, and we could see rates drop more. But that's not the most likely case.

My Opinion: I think that ultra-low rates were a once-in-a-lifetime event. They were a response to a very specific situation.

How This Affects the Housing Market

Higher rates have definitely cooled things down. It's harder for people to afford homes, so sales have slowed. Some people who locked in low rates are hesitant to sell, which means fewer homes on the market.

  • Affordability Crisis: Many potential buyers are priced out of the market.
  • Inventory Shortage: The “lock-in effect” keeps homeowners from selling.

Here's What You Can Do

So, what if you're looking to buy a home or refinance? Don't despair! There are still options:

  1. Consider an Adjustable-Rate Mortgage (ARM): ARMs usually have lower initial rates. This can be a good option if you don't plan to stay in the home for a long time.
  2. Look for Assistance Programs: First-time buyer programs can help with down payments and closing costs. FHA, VA, and USDA loans are examples of that.
  3. Shop Around: Get quotes from multiple lenders and see if you can buy points to lower your rate. Paying for points can potentially reduce your rate.
  4. Refinance Wisely: If rates drop in the future, consider refinancing to a shorter term or taking cash out.
  5. Explore Home Equity Options: A HELOC or Home Equity Loans can be used for repairs so you aren't using your current mortgage.
  6. Improve Your Credit: The better your credit score, the better the rate you'll get.

The Bottom Line: Be Realistic

I said that the current state is highly unlikley to return, and I still believe that. Ultra-low rates were an exception, not the rule. Don't wait around for them to come back. Instead, focus on what you can control: your credit score, your down payment, and your budget.

Be smart, be patient, and you'll find the right opportunity.

Capitalize Amid Rising Mortgage Rates

With mortgage rates expected to remain high in 2025, it’s more important than ever to focus on strategic real estate investments that offer stability and passive income.

Norada delivers turnkey rental properties in resilient markets—helping you build steady cash flow and protect your wealth from borrowing cost volatility.

HOT NEW LISTINGS JUST ADDED!

Speak with a seasoned Norada investment counselor today (No Obligation):

(800) 611‑3060

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Today’s Mortgage Rates – August 19, 2025: 30-Year FRM Rises by 5 Basis Points, Refi Rates Jump

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On August 19, 2025, mortgage rates today show a slight increase in the average 30-year fixed mortgage rate to 6.72%, up by 2 basis points from 6.70% the previous day and 5 basis points from last week’s 6.67%, according to Zillow’s latest data. Meanwhile, refinance rates are also up, with the 30-year fixed refinance rate rising to 6.97%, a 5 basis points increase from yesterday and 6 basis points higher than last week.

However, not all rates moved upwards: the national average 15-year fixed mortgage rate decreased slightly to 5.76%, and the 5-year ARM mortgage rate dropped to 7.26%. This combination of mixed movement reflects ongoing market uncertainty tied to economic data and Fed policies.

Key Takeaways:

  • 30-year fixed mortgage rate increased slightly to 6.72% (up 2 basis points from the previous day).
  • 30-year fixed refinance rate rose to 6.97%, up 5 basis points from yesterday and 6 basis points from last week.
  • 15-year fixed mortgage rate fell to 5.76%, down 5 basis points.
  • 5-year ARM mortgage rate decreased to 7.26%, down 7 basis points.
  • Experts predict mortgage rates will remain above 6% through 2025 and only dip below 6% in Q3 2026.
  • The Federal Reserve is expected to potentially cut interest rates in September 2025, which might lower mortgage rates in the coming weeks.

For detailed current rates, market drivers, and what these fluctuations mean for homebuyers and refinancers, read on.

Understanding Today’s Mortgage Rates on August 19, 2025

Mortgage rates are influenced by several factors, including inflation, employment data, Federal Reserve policies, and broader economic trends. On August 19, 2025, the average 30-year fixed mortgage rate sits at 6.72%, marginally higher than last week. This slow rise contrasts with some decreases seen in other products like the 15-year fixed mortgage and certain adjustable-rate mortgages (ARMs).

The modest uptick in the 30-year fixed mortgage rate reflects concerns about sticky inflation and ongoing economic uncertainty. Employment reports from early August showed weaker job growth, which generally cools inflation expectations but also signals slower economic expansion. Because mortgage rates closely follow bond yields tied to inflation and growth forecasts, these mixed signals are creating a somewhat volatile but narrow rate range around the mid-to-high 6% level.

Current Mortgage Rate Summary Table (August 19, 2025)

Mortgage Program Rate 1-Week Change APR 1-Week Change
30-Year Fixed 6.72% Up 0.05% 7.22% Up 0.10%
20-Year Fixed 6.43% Down 0.24% 6.90% Down 0.08%
15-Year Fixed 5.76% No change 6.08% Up 0.01%
10-Year Fixed 5.48% No change 5.84% No change
7-Year ARM 7.45% Down 0.08% 8.12% Up 0.12%
5-Year ARM 7.26% Up 0.02% 7.86% Up 0.05%

Source: Zillow Mortgage Rates Data, August 19, 2025

Refinance Rates Today – August 19, 2025

Refinance rates reflect opportunities for current homeowners to renegotiate their mortgages. As of today, the 30-year fixed refinance rate increased to 6.97%, climbing 5 basis points from the previous day and 6 basis points higher than last week’s 6.91%. The 15-year fixed refinance rate also moved up to 5.81%, an 8 basis points increase, and the 5-year ARM refinance rate jumped notably by 16 basis points to 7.82%.

Refinance Program Rate 1-Week Change APR 1-Week Change
30-Year Fixed Refinance 6.97% Up 0.06% N/A N/A
15-Year Fixed Refinance 5.81% Up 0.08% N/A N/A
5-Year ARM Refinance 7.82% Up 0.16% N/A N/A

Source: Zillow Refinance Rates Data, August 19, 2025

Economic Factors Affecting Mortgage and Refinance Rates

The higher rates seen in both mortgage and refinance markets recently are influenced by a few key elements:

  • Weak Job Growth and Inflation: Early August’s weak job growth figures tempered expectations for rapid economic expansion but inflation remains somewhat sticky, meaning it is still above comfortable levels. This combination is causing investors to reassess interest rate expectations.
  • Federal Reserve Activity: The Federal Reserve had held rates steady through several meetings in 2025 after aggressive hikes from 2022 to 2023. Recently, the Fed’s signals suggest possible interest rate cuts soon, especially after the July job report showed a slowing economy. The CME FedWatch tool currently shows about a 91% chance of a 0.25% cut by September 2025, which would likely help push mortgage rates down.
  • Long-Term Inflation Risks: Despite expectations for cuts, inflation risks remain, partly due to tariffs and supply chain constraints, which keep interest rates elevated.

The Federal Reserve’s Role and Forecast for Mortgage Rates

The Federal Reserve has a significant influence on mortgage rates through its decisions on the federal funds rate and monetary policy signals.

From 2021 through 2023, the Fed increased rates aggressively to combat inflation, pushing mortgage rates to 20-year highs. By late 2024, the Fed started cutting rates, but these have mostly paused in 2025 as they assess economic data.

Looking ahead:

  • Analysts at the Mortgage Bankers Association and Fannie Mae forecast rates to hover in the 6.4% to 6.8% range through the rest of 2025.
  • The Fed’s next key meetings in mid-September and December 2025 will be critical for rate movement.
  • The Fed aims to reduce rates slowly, potentially lowering the cost of borrowing toward 6% by late 2025 or 2026.
  • Market factors remain fluid, so mortgage rates could fluctuate based on economic developments.

How Do Today’s Rates Affect Borrowers?

  • For homebuyers, the current 30-year fixed mortgage rate at 6.72% means higher monthly payments compared to recent years but stable within the current range. Buyers should consider their own financial situations and not expect immediate rate drops, though modest declines may occur if the Fed cuts rates next month.
  • For refinancers, the increase to 6.97% for 30-year fixed refinance loans signals caution. Those with very high existing rates (above 7%) might wait for potential Fed rate cuts, but the timing is uncertain. Shorter-term refinance options, like 15-year fixed or ARM products, may offer alternatives.

Example Calculation: Monthly Mortgage Payment at Today’s Rates

If you take out a $300,000 mortgage with a 30-year fixed interest rate of 6.72%, your monthly payment for principal and interest would be about $1,937.

If the interest rate were a bit lower, say 6.0%, your monthly payment would drop to around $1,799.

That means by getting the lower rate, you’d save about $138 every month on your mortgage payment.

Forecast Summary: What Experts Say

  • National Association of REALTORS® expects average mortgage rates to settle around 6.4% in H2 2025 and dip further to 6.1% in 2026.
  • Fannie Mae forecasts that mortgage rates won’t drop below 6% until Q3 2026.
  • Realtor.com predicts a slow easing of rates to around 6.4% by year-end 2025.
  • The Mortgage Bankers Association expects rates to mostly stay near current levels, ending 2025 around 6.7% and moving toward 6.3% in 2026.

Broader Context: Why Rates Are Staying Elevated Longer Than Expected

Many predicted mortgage rates would fall over the past year, but rates have instead climbed. This is primarily due to persistent inflation and economic factors that kept the Federal Reserve cautious in cutting rates quickly.

This reality highlights why timing the market perfectly is challenging. Borrowers are often better off focusing on their personal financial readiness rather than trying to predict rate movements precisely.

Capitalize Amid Rising Mortgage Rates

With mortgage rates expected to remain high in 2025, it’s more important than ever to focus on strategic real estate investments that offer stability and passive income.

Norada delivers turnkey rental properties in resilient markets—helping you build steady cash flow and protect your wealth from borrowing cost volatility.

HOT NEW LISTINGS JUST ADDED!

Speak with a seasoned Norada investment counselor today (No Obligation):

(800) 611‑3060

Get Started Now

Austin Housing Market: Trends and Forecast 2025-2026

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Thinking about buying, selling, or just curious about what's happening in the Austin housing market? You're in the right place. The Austin real estate market is currently showing signs of stabilization with median sales prices remaining flat compared to the previous year, but inventory is significantly up. Let's dive into the specifics to give you a better understanding of the current trends.

Austin Housing Market Trends in 2025:

Key Takeaways from the June 2025 Austin Housing Market Report

Based on the latest data from Unlock MLS & ABoR, here's a snapshot of what's happening:

  • Median Sales Price: $449,900 (No Change Year-over-Year)
  • Closed Sales: 2,823 (Up 2.8% Year-over-Year)
  • Sales Dollar Volume: $1.65 Billion (Up 4.5% Year-over-Year)
  • Months of Inventory: 5.5 Months (Up 0.7 Months Year-over-Year)
  • New Listings: 4,562 (Up 4.8% Year-over-Year)
  • Active Listings: 15,360 (Up 18.2% Year-over-Year)
  • Pending Sales: 2,706 (Up 3.5% Year-over-Year)
  • Average Days on Market: 72 Days (Up 18 Days Year-over-Year)
  • Average Close to List Price: 93.9% (Compared to 94.8% in June 2024)

Digging Deeper: Analyzing the Numbers

Let's break down what these numbers really mean for you:

1. Home Price Stability (For Now):

The fact that the median sales price hasn't changed compared to last year is significant. After the crazy price spikes we saw in recent years, this suggests that prices have plateaued, at least temporarily. From my perspective, this is a welcome sign of normalization. The frenzied bidding wars seem to be cooling off, giving buyers a bit more breathing room.

2. More Homes to Choose From:

One of the most noticeable shifts is the substantial increase in active listings (up 18.2%). This means buyers have far more options than they did a year ago. Remember when it was practically impossible to find a house, good or bad, that the banks had not already grabbed? Sellers can't automatically expect to get top dollar anymore.

3. Inventory is Rising:

The climb to 5.5 months of inventory reflects the increased number of homes on the market. The concept of inventory is pretty simple: it represents the time, expressed in months, it would take to sell all the homes currently listed for sale, assuming no new listings come to market. A higher inventory can indicate a buyer's market. This means that, statistically, buyers have some leverage. From my perspective, the sweet spot for a balanced market is usually around 6 months of inventory.

4. Sales Activity:

The rise in closed sales, though modest at 2.8%, hints at a stable level of demand. Also, the slight increase in pending sales (up 3.5%) hints at a level of ongoing buyer interest.

5. Time on Market:

The average days on market have increased significantly. This aligns with the increased number of listings.

6. Sales Volume:

As we see a substantial rise of 4.5 percent year-over-year in sales volume, this rise is driven by a combination of factors:

  • An increase in the number of houses that have been sold
  • Higher average sales prices as compared to the previous year

7. List price vs. Closed price:

As we see a decline in the percentage of original list price, buyers are able to negotiate better deals now.

What's Driving These Trends?

Several factors are influencing the Austin housing market right now:

  • Interest Rates: Mortgage rates play a huge role. As rates fluctuate, it directly impacts affordability and buyer demand. I personally feel like rate stability will be a key factor in shaping the market's direction.
  • Job Growth: Austin's booming job market has been a major driver of housing demand. While growth may be moderating slightly, the influx of new residents continues to put pressure on housing.
  • Construction: New construction is adding more supply to the market, which can help moderate price increases. However, construction timelines and material costs can be unpredictable.
  • Economic Conditions: Overall economic health, both nationally and locally, influences buyer confidence and willingness to invest in real estate. Any economic uncertainty generally causes buyers to pause, which further slows down the market.

My Take on the Austin Market

Here's my personal perspective, based on my years of experience in the Austin market:

The Austin housing market is in a period of transition. The days of runaway price growth seem to be behind us, at least for now. We're moving towards a more balanced market, where buyers have more choices and sellers need to be more strategic.

I believe that rising inventory will continue to be a key theme. As more homes come on the market, buyers will have more power to negotiate. This doesn't necessarily mean prices will crash, but it does mean that sellers need to be realistic about pricing their homes competitively.

It's vital to remember that real estate is local. What's happening in one neighborhood might be very different from another. Factors like school districts, proximity to amenities, and the type of housing stock all play a role.

For Buyers:

Don't feel rushed. Take your time to find the right property and negotiate the best possible deal. Get pre-approved for a mortgage so you know your budget and can move quickly when you find the perfect home. Work with a knowledgeable real estate agent who understands the Austin market and can help you navigate the process.

For Sellers:

Price your home strategically based on current market conditions. Don't overprice it, or it will sit on the market. Make sure your home is in top condition. Buyers have more choices, so presentation matters. Be prepared to negotiate. Buyers may be looking for concessions like closing cost assistance or repairs.

Austin Housing Market Forecast 2025-2026: What to Expect?

Here's the scoop: the Austin housing market forecast suggests a continued slight dip in home values. While not a crash, expect a gradual decrease in the near term. I'll break down the latest predictions and what they mean for you.

Right now, the average home value in the Austin-Round Rock area is around $451,858. That's according to credible real estate sources, and it shows a 5.1% decrease over the past year. So, prices have already cooled off a bit.

What the Experts are Saying: The Forecast

Let's dive into what the data is telling us. Zillow has some specific forecasts for the Austin area, and here's a simplified look at them:

Area May 2025 Home Value Change
Austin, TX -0.8%
Dallas, TX -0.6%
Houston, TX -0.3%
San Antonio, TX -0.4%
McAllen, TX -0.2%
El Paso, TX 0%
Killeen, TX -0.2%
Corpus Christi, TX -0.4%
  • Near Term (June 2025): Zillow predicts a further 0.8% decrease in home values.
  • Mid Term (August 2025): The forecast indicates an additional 2.4% decrease.
  • One-Year Outlook (May 2025 to May 2026): Over the next year, Zillow is projecting a decrease of around 4.2%.

As you can see, the data suggests that the housing market correction is not only real, but also expected to persist. This could be great news if you are looking to buy a house for yourself, as you may get better deals to buy a home. However, if you are looking to sell a property, then you might have to reconsider your plans.

How does Austin compare to other Texas cities?

Take a look at the forecast for other major Texas metros:

City June 2025 Forecast August 2025 Forecast May 2026 Forecast
Dallas -0.6% -1.5% -2.2%
Houston -0.3% -0.7% -1.8%
San Antonio -0.4% -1.2% -3.2%
Austin -0.8% -2.4% -4.2%

Austin seems to be experiencing a slightly more significant correction compared to other major cities in Texas. However, let's not worry too much, as this is only a Zillow forecast. The price movement is only determined by demand and other circumstances.

National Trends: What's Happening Across the US?

It’s also worth considering the national housing picture to contextualize the Austin housing market forecast. Lawrence Yun, the Chief Economist for the National Association of Realtors (NAR), has a more positive outlook. Here's what he expects:

  • Existing Home Sales: Up 6% in 2025 and 11% in 2026.
  • New Home Sales: Up 10% in 2025 and 5% in 2026.
  • Median Home Prices: Up 3% in 2025 and 4% in 2026.
  • Mortgage Rates: Averaging around 6.4% in the second half of 2025, and settling around 6.1% in 2026.

These national trends suggest a potential recovery and stabilization in the broader housing market, so hopefully Austin will follow suit too.

Will Austin Housing Prices Crash? And What About 2026?

Based on the data, a full-blown crash in Austin seems unlikely. Instead, we're looking at a continued, gradual correction. Demand in Austin is still high, and the economy is relatively strong.

As for 2026, it's tough to say for sure, but if national trends hold true, we might see a slight increase in Austin home values. However, this would likely be modest, more in line with inflation and normal market growth.

My Two Cents

Predicting the future is always tricky, but here are a few things I'm watching closely:

  • Continued Inventory Growth: I expect inventory to continue to rise in the coming months, giving buyers even more options.
  • Moderating Price Growth: While I don't expect prices to plummet, I do think we'll see slower price growth than we've seen in recent years.
  • Increased Negotiation: Buyers will have more leverage to negotiate, so sellers need to be prepared to make concessions.
  • Focus on Value: Buyers will be more discerning and will prioritize value and quality over simply getting into the market.

I live and breathe this market, and based on what I'm seeing, I think a balanced approach is key. If you're a buyer, take advantage of the current dip and find a property that fits your needs. If you're a seller, be realistic about pricing and be prepared to negotiate. The Austin real estate market remains desirable in the long term, but it's undergoing a shift towards a more sustainable pace.

Is the Austin Housing Market Still Overpriced?

If you're thinking about buying a house in Austin, you're likely wondering: is the market overpriced? The answer, like most things in real estate, isn't a simple yes or no. Let's dive into the data and see what it tells us.

There's no doubt Austin's housing market has been on fire. A strong local economy, booming population, and influx of out-of-state buyers have sent home prices soaring. Studies show Austin homes are among the most overvalued in the nation, with buyers paying well above what the house might be worth based on traditional factors. Boise, Idaho, is the only city with a higher premium!

Before you write off Austin completely, consider this: compared to other major cities, Austin can still be affordable. While the median price tag is high compared to its own history, it's lower than giants like San Francisco or Los Angeles. Austin's cost of living is also generally lower, making homeownership a more realistic goal for some buyers.

Looking ahead, experts are bullish on Austin's long-term prospects. The city's strong and diverse economy is less likely to take a tumble in a downturn, and the growing population suggests continued demand for housing. This could mean your investment appreciates over time.

So, is Austin overpriced? It depends on your perspective and priorities. If affordability is your main concern, the high prices might be a hurdle. But for those seeking a long-term investment in a vibrant city with a healthy economy, Austin could be a good fit.

The most important factor? Understanding your own financial situation and goals. Carefully evaluate your budget and long-term plans before deciding to buy in Austin, or any market for that matter. Don't be afraid to crunch the numbers and talk to a financial advisor to make sure your dream home doesn't turn into a financial nightmare.

Are There Signs of a Housing Bubble in Austin?

While discussions about a housing bubble are common, Austin's current market dynamics suggest a more nuanced reality. While home prices have surged drastically over recent years, the recent market corrections do not necessarily indicate a bubble that is about to burst. Instead, the recent declines signal a recalibration of values within the market.

Economic fundamentals such as strong job growth, diverse industries, and lasting demand for housing help support the market long-term. Nevertheless, potential buyers and investors should remain vigilant and conduct thorough market analysis to understand both local and national economic indicators that could influence Austin's real estate landscape.

Which Neighborhoods in Austin Are Seeing the Most Growth or Decline?

Certain neighborhoods in Austin are emerging as hot spots for growth, driven by ongoing development and lifestyle appeal. Areas like North Austin and East Austin have gained popularity among younger buyers and families due to their vibrant culture, accessibility, and amenities.

Conversely, some traditionally desirable neighborhoods are witnessing slower sales, primarily due to higher prices and mature markets that may not offer much in terms of new inventory. Identifying which neighborhoods are growing or declining entails paying attention to broader market trends, demographic shifts, and the availability of amenities that cater to emerging buyer preferences.

Is Austin Still Attracting Out-of-State Buyers?

Austin continues to attract a significant number of out-of-state buyers, drawn by its dynamic economy, quality of life, and cultural offerings. Although there have been fluctuations in migration trends, the city’s reputation as a tech hub and cultural hotspot maintains its allure for many relocating from states like California, New York, and Illinois.

This influx adds layers to the housing demand, as newcomers seek to take advantage of Austin's unique lifestyle and employment opportunities. As long as the city retains its appeal, it is likely to continue attracting out-of-state buyers, contributing to both local market vitality and growth challenges.

What Impact is Austin's Job Market Having on Housing Demand?

Austin's robust and diverse job market plays a significant role in driving housing demand. Tech industries, educational institutions, and healthcare services provide stable employment opportunities that continue to attract new residents. With companies expanding and relocating to the area, the demand for housing—both for purchase and rental—remains strong.

Additionally, job seekers and young professionals are increasingly drawn to the city's innovative landscape, further fueling residential demand. As long as Austin's economic climate remains favorable, the impact on housing demand is likely to persist, keeping the market dynamic and competitive.

Should You Invest in the Austin Real Estate Market?

Austin's rapidly expanding economic industry is driving more people into the city which is increasing the housing demand. A number of reasons have affected the present situation of the Austin housing market, one of which is the high migration of firms and persons relocating to the city from Texas and out-of-state, which has led to a robust and varied economy that attracts people seeking opportunity.

A surge of people moving in, combined with rapid population growth and low mortgage interest rates, has turned Austin and its surrounding area into a sellers' market. Austin’s engine of job and population growth is not projected to slow down anytime soon—the biggest drivers of residential real estate demand. Its economy has diversified and strengthened over the past two decades.

Companies like Google and Tesla are moving operations to Austin. The software giant Oracle has also relocated its headquarters here. As more companies move here, that means more people looking for homes, and the city is also attractive to outside investors. With a steady influx of job creation in the pipeline, the housing market will continue to post strong numbers. Big companies moving here will also play into what happens to the housing market.

If you're considering real estate investment, Austin, Texas, is a city that should be on your radar. Known for its vibrant culture, strong economy, and population growth, Austin offers numerous opportunities for real estate investors. Let's explore in detail why Austin is a promising destination for real estate investment.

Population Growth and Trends

Population Growth:

  • Austin has been experiencing consistent and substantial population growth for many years. The city's population has been steadily increasing, making it one of the fastest-growing metropolitan areas in the United States.
  • The city's appeal to newcomers is driven by factors like its vibrant tech scene, cultural attractions, and overall quality of life.

Trends:

  • The population growth trend in Austin is expected to continue, with projections indicating a significant increase in residents over the coming years.
  • As the city's population expands, the demand for housing, both rental and owned, is likely to rise, creating opportunities for real estate investors.

Economy and Jobs

Economic Strength:

  • Austin's economy is robust and diverse, with a thriving technology sector, a burgeoning startup scene, and a strong presence of major corporations.
  • The city consistently ranks high in terms of job creation and economic growth, making it an attractive destination for professionals seeking employment opportunities.

Job Market:

  • The city's job market is diverse and dynamic, with a focus on technology, healthcare, education, and entertainment.
  • Employment opportunities continue to draw individuals to Austin, contributing to the population growth and housing demand.

Livability and Other Factors

Livability:

  • Austin consistently receives high marks for its quality of life. The city offers a vibrant cultural scene, excellent healthcare facilities, and access to outdoor activities.
  • It's known for its music and arts culture, making it a desirable place to live for professionals and creatives.

Education:

  • Austin is home to top-tier educational institutions, including the University of Texas at Austin. This draws students, academics, and their families to the city, further boosting the demand for housing.

Infrastructure:

  • The city has invested in infrastructure and transportation improvements to accommodate its growing population, making it more accessible and commuter-friendly.

Austin Rental Property Market Size and Growth

Rental Market:

  • Austin's rental property market is substantial and continues to grow. The city offers a wide range of rental properties, from apartments to single-family homes, catering to a diverse tenant population.
  • The city's dynamic job market attracts young professionals, making it an ideal location for rental property investment.

Growth Potential:

  • The city's population growth and job market strength contribute to the growth potential of the rental property market. As more people move to Austin, the demand for rental units is expected to rise.
  • Investors can explore various rental strategies, including long-term leases, short-term rentals, and vacation rentals, to diversify their real estate portfolio.

Other Factors Related to Real Estate Investing

Investor-Friendly Environment:

  • Austin's business-friendly environment extends to real estate investment. The city offers attractive incentives and a favorable legal framework for real estate investors.
  • Real estate investors benefit from a strong property rights regime and a well-regulated market.

Tax Benefits:

  • Texas does not have a state income tax, which can be advantageous for investors looking to maximize their returns.
  • Investors should explore the tax implications of specific investment strategies, including property taxes and capital gains.

Market Resilience:

  • Austin's real estate market has shown resilience during economic downturns, and it is considered one of the more stable markets in the country.
  • Investors appreciate the market's ability to weather economic fluctuations and maintain its growth trajectory.

Diversification:

  • Investors can diversify their portfolios by exploring various types of real estate, from residential properties to commercial and mixed-use developments, taking advantage of Austin's growing and diverse market.

As a real estate investor, Austin's population growth, strong economy, livability, rental property market size, and other investor-friendly factors make it a compelling choice. However, it's essential to conduct thorough market research, consult with local real estate experts, and tailor your investment strategy to your specific goals and risk tolerance. Austin's real estate market offers exciting opportunities, but informed decision-making is key to success.

California Housing Affordability Drops in Q2 2025 Amid High Mortgage Rates

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The dream of homeownership in California took a slight hit in the second quarter of 2025, with affordability dipping compared to the first quarter. This means fewer households could afford to buy a median-priced home this past quarter. However, it's not all doom and gloom; looking back a full year, things have actually improved slightly.

These numbers from the California Association of Realtors (C.A.R.) don't entirely surprise me. We're seeing a familiar tug-of-war between rising home prices and the persistent specter of elevated interest rates. While the quarter-over-quarter dip is a concern for many prospective buyers, the year-over-year gain offers a glimmer of hope that the market might be stabilizing, albeit slowly.

California Housing Affordability Dips in Second-Quarter 2025, But Signs of Improvement Remain

The Numbers Don't Lie: A Closer Look at Affordability

Let's break down what these figures really mean for the average Californian. In the second quarter of 2025, only 15% of California households had the financial muscle to purchase the median-priced home, which was pegged at a staggering $905,680. This is a step back from the 17% who could afford it in the first quarter of 2025. To make those monthly payments, including principal, interest, taxes, and insurance (often called PITI), you'd need a solid $232,400 annual income, translating to a monthly payment of about $5,810.

On the condo and townhome front, things are a little better, but still tough. Twenty-five percent of home buyers could swing a median-priced condo or townhome at $670,000. This required a minimum annual income of $172,000, with monthly payments around $4,300. While this is an improvement from the 22% in the second quarter of 2024, it still represents a significant financial hurdle for many.

Why the Dip? Interest Rates and Price Tag Tango

So, what's behind this slowdown in affordability? The report from C.A.R. points to two main culprits: elevated interest rates and higher home prices. Even though the effective interest rate saw a slight dip to 6.90% in the second quarter of 2025 from 6.93% in the first quarter, and was down from 7.10% a year ago, it's still a significant increase compared to the ultra-low rates we saw a few years back. This means borrowing that much money is considerably more expensive.

Think about it: that extra fraction of a percent on a mortgage over 30 years adds up to thousands, even tens of thousands, of dollars more in interest paid. My own clients often express frustration, noting that even with a bit more income, the higher interest rates simply push them out of their desired price range.

The median price of a single-family home also jumped 6.9% from the first quarter of 2025. Although the report mentions a year-over-year decrease for the first time in eight quarters – a truly encouraging sign – the sequential jump is what's contributing to the quarterly affordability dip. It’s a complex market, indeed.

A Flicker of Hope: Year-Over-Year Improvement

Now, for the brighter side of the story. When we compare the second quarter of 2025 to the same period in 2024, California’s housing affordability has indeed improved. Back then, only 14% of households could afford a median-priced home. This year-over-year increase, though small, is significant. It suggests that while the immediate quarter was tougher, the market is showing resilience and a potential for future improvement.

This year-over-year gain is largely thanks to mortgage rates cooling down from their peak and, in some areas, a slight moderation in home prices. The C.A.R. report accurately highlights that for the first time in eight quarters, California saw a year-over-year decrease in home prices. This is a crucial detail that indicates the frenzy of price hikes might be cooling off, which is essential for long-term affordability.

The National Picture: California Still Out of Reach

It’s always useful to see how we stack up against the rest of the country. Nationwide, 34% of households could afford the median-priced home of $429,400 in the second quarter of 2025. This required an annual income of $110,400. While this also saw a dip from the previous quarter, it’s a significant climb from the 33% recorded in the second quarter of 2024.

The stark difference is clear: the minimum income needed to afford a home in California is more than double that required nationally. This isn't just a slight gap; it’s a chasm that highlights the unique challenges of the California housing market. My conversations with clients who are relocating from other states often revolve around this very disparity – the sheer cost of entry into the California dream.

County-by-County Breakdown: A Patchwork of Affordability

California's housing market isn't a monolith; it's a diverse collection of regional economies and housing markets. The report provides a granular look at this, and the variations are striking.

Key Takeaways from the County Data:

  • Affordability declined in 23 counties compared to the previous quarter, remaining unchanged in 14.
  • Despite higher prices, 16 counties saw affordability improve quarter-over-quarter due to lower mortgage rates and higher incomes in those specific areas.
  • When looking year-over-year, affordability improved in 41 counties, while 12 saw declines or no change. This reinforces the notion of a broader, though uneven, trend towards better affordability compared to last year.

The Most and Least Affordable Counties:

  • Lassen County remains the most affordable, with 46% of households able to afford the median-priced home. It also boasts the lowest qualifying income at just $73,200.
  • Glenn County (39% affordability) and Tuolumne County (38% affordability) also show high levels of accessibility.
  • On the flip side, Mono County is the least affordable, with only 8% of households able to buy the median-priced home. It requires an income of $232,800 to do so.
  • Monterey and Santa Barbara counties follow closely at 10% affordability.
  • The pricey San Francisco Bay Area continues to dominate the most expensive listings. San Mateo County demands the highest qualifying income at $564,800 for a median-priced home. Santa Clara ($548,800) and San Francisco ($459,200) are not far behind.

This county-level data is crucial for anyone looking to buy. It underscores the importance of understanding specific local market dynamics. A buyer in Lassen County faces entirely different financial realities than someone trying to purchase in San Mateo.

Looking Ahead: What Does the Future Hold?

The report offers some forward-looking insights that are worth considering. They expect interest rates to ease further in the coming six months, predicting a continued slowdown in the economy. This is good news for potential homebuyers, as lower rates directly translate to lower monthly payments.

However, there's a caveat: tariffs could lead to increased consumer prices and inflation. This creates a tricky situation for the Federal Reserve, which will have to balance controlling inflation with supporting job growth. If inflation heats up, it could lead to interest rates staying higher for longer, potentially negating some of the expected affordability improvements.

From my perspective on the ground, I'm seeing a market that is still very much in flux. Sellers are adjusting their expectations, and buyers are becoming more strategic. We're not in a buyer's paradise by any stretch of the imagination, but we're also moving away from the extreme seller's market of a few years ago.

The expectation of moderating home prices in the coming months, especially as the market cools after the spring buying season, is something I'm hearing from many of my colleagues as well. This, combined with potentially lower interest rates, could indeed lead to a noticeable uptick in affordability by the end of 2025.

The Ongoing Challenge: Beyond the Numbers

It's important to remember that these affordability indexes are based on statistical averages. They don't capture the full emotional and practical realities of buying a home. The stress of saving for a down payment, the competition for desirable properties, and the sheer uncertainty of the market can be overwhelming for many.

As a seasoned observer of this market, I understand that even when the numbers say a home is affordable, the journey to getting there is often a long and arduous one. The dream of homeownership in California is a potent one, driving many to make significant sacrifices. It's our job as industry professionals and, for those who are interested, as informed consumers, to understand the trends and navigate them as effectively as possible.

The California housing affordability dips in second-quarter 2025 is a data point, a snapshot in time. While it presents immediate challenges, the underlying trends and future predictions suggest that the market is slowly but surely working towards a more balanced and, hopefully, more accessible future for aspiring homeowners.

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Today’s Mortgage Rates – August 18, 2025: Fixed Rates Climb, 30-Year FRM Rises by 2 Basis Points

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As of August 18, 2025, mortgage rates have inched slightly higher this week. According to Zillow, the national average for a 30-year fixed mortgage rate climbed from 6.67% to 6.69%, though refinance rates have edged down by a few basis points. Rates remain stubbornly above 6% with experts forecasting gradual declines, but not dips below this threshold until late next year or beyond. This subtle uptick in mortgage rates and the concurrent drop in refinance rates reflect a cautious market response to economic signals, federal monetary policy, and inflation data.

Today's Mortgage Rates – August 18, 2025: Fixed Rates Climb, 30-Year FRM Rises by 2 Basis Points

Key Takeaways

  • 30-year fixed mortgage rate rose slightly to 6.69%, up 2 basis points since last week.
  • 15-year fixed mortgage rate increased to 5.81%.
  • 5-year ARM mortgage rate moved up to 7.19%.
  • Refinance 30-year fixed rates decreased marginally to 6.87%, down 4 basis points.
  • Experts predict rates will remain above 6% through 2025, possibly dropping below 6% only by Q3 2026.
  • The Federal Reserve’s stance with possible rate cuts in the fall 2025 could influence mortgage rates downward.
  • Economic uncertainty and inflation's stickiness keep rates elevated.

Current Mortgage Rates Overview for August 18, 2025

Understanding the current mortgage rates helps buyers and refinancers grasp what to expect and where the market stands. The rates vary depending on loan terms and types — conventional conforming loans, government-backed loans, and adjustable-rate mortgages (ARMs).

Loan Type Rate (%) Change From Last Week APR (%) Change From Last Week
30-Year Fixed (Conforming) 6.69 +0.02% 7.24 +0.11%
20-Year Fixed (Conforming) 6.37 -0.30% 6.88 -0.11%
15-Year Fixed (Conforming) 5.81 +0.05% 6.18 +0.11%
10-Year Fixed (Conforming) 5.48 0.00% 5.84 0.00%
7-Year ARM (Conforming) 7.30 -0.24% 8.06 +0.05%
5-Year ARM (Conforming) 7.19 -0.05% 7.96 +0.15%
30-Year Fixed FHA 6.26 +0.21% 7.28 +0.22%
30-Year Fixed VA 6.25 +0.11% 6.46 +0.13%
15-Year Fixed FHA 5.58 +0.02% 6.54 +0.02%
15-Year Fixed VA 5.88 +0.12% 6.23 +0.15%

Source: Zillow, August 18, 2025

Refinance Rates Today – August 18, 2025

Refinancing may offer some small relief, as refinance rates have edged slightly downward, contrary to purchase mortgage rate trends. Here’s the latest refinance average rates:

Refinance Loan Type Rate (%) Change From Last Week APR (%) Change From Last Week
30-Year Fixed Refinance 6.87 -0.04% — —
15-Year Fixed Refinance 5.87 +0.13% — —
5-Year ARM Refinance 7.71 0.00% — —

Source: Zillow, August 18, 2025

What’s Driving Mortgage Rates Right Now?

Mortgage rates have hovered between approximately 6.6% and 6.8% throughout most of 2025, registering minor fluctuations in response to pivotal economic reports and central bank policies.

  • Economic Signals: Weak job growth data released early August indicated slowing employment gains, which tends to temper rate increases as economic momentum eases.
  • Federal Reserve Policy: Markets are pricing in a likely 25 basis point cut to the federal funds rate in September 2025, with some economists anticipating up to two cuts by year-end. This prospective easing is due to slowing growth and difficulties in inflation reduction, despite inflation still being somewhat “sticky.”
  • Inflation Trends: Core inflation remains above the Fed’s comfort zone (~2.7% PCE), but it’s below harsher projections, creating a delicate balancing act that influences bond yields and mortgage interest rates.

The interplay of these economic forces shapes mortgage rate trends: faltering growth usually pushes rates down, but persistent inflation can keep rates elevated.

Expert Forecasts on Mortgage Rates Under Current Circumstances

Multiple authoritative groups have issued forecasts that reflect cautious optimism for homebuyers and refinancers:

  • National Association of REALTORS®: Predicts mortgage rates will average 6.4% in the second half of 2025 and dip to 6.1% by 2026.
  • Fannie Mae: Projects rates to stay above 6% until Q3 2026, nearing 6.4% by the end of 2025 (Fannie Mae July Housing Forecast).
  • Realtor.com: Indicates a slow easing with average purchase mortgage rates closing at 6.4% by year-end.
  • Mortgage Bankers Association: Expects 30-year fixed rates to hold around 6.7% at year-end 2025 before dropping below 6.5% in 2026.

This consensus supports the view that while mortgage affordability remains a challenge, prospective buyers shouldn’t expect dramatic rate drops this year.

How The Federal Reserve's Monetary Policy Affects Mortgage Rates

Understanding the Fed’s recent monetary policies and their impact on mortgage rates is critical for grasping the present and future environment:

  • 2021-2023: The aggressive rate hikes by the Fed to fight inflation pushed mortgage rates to two-decade highs.
  • Late 2024: The Fed pivoted to cutting rates for the first time in years, reducing the federal funds rate by 100 basis points in total.
  • 2025 Stalemate: The Fed paused hikes and rate cuts from January through July 2025, citing concerns over persistent inflation and uneven economic data.
  • Upcoming Meetings: Market odds for a September 2025 rate cut hover just below 50%, sensitive to incoming labor and inflation reports.

The Fed influences mortgage rates indirectly by affecting bonds and the cost of money. Their future moves, especially potential cuts, could bring relief to mortgage rates if inflation moderates.

Example: Calculating Monthly Payment on a 30-Year Fixed Mortgage at Today's Rate

To give perspective on how today's mortgage rates translate into payments, consider a $300,000 loan at 6.69% fixed for 30 years:

Loan Amount Interest Rate Term Monthly Principal & Interest
$300,000 6.69% APR 30 years $1,927

Calculation:

Using the standard mortgage formula, the monthly payment (principal + interest) is approximately $1,927.

Compare that to last week’s rate of 6.67%, which would have yielded a payment of about $1,918. This small increase adds roughly $9 more per month.

Why Mortgage Rates Remain Above 6% Despite Expectations

Throughout 2024 and 2025, many anticipated mortgage rate declines due to Fed rate cuts. However, rates have stubbornly stayed above 6% because:

  • Inflation pressures remain elevated, causing bond yields—and mortgage rates—to be resilient.
  • Global economic uncertainties create volatility, leading to cautious movements among investors.
  • Lag effects: Mortgage rates can be slow to respond to Fed moves and often factor in long-term inflation expectations more than immediate policy changes.

Thus, it pays to understand that mortgage rates reflect a complex blend of factors, not just Fed announcements.

Detailed Breakdown of ARM vs Fixed Rates

For borrowers weighing options between fixed and adjustable mortgage rates, here’s the current snapshot:

Loan Type Current Rate (%) Weekly Change Notes
30-Year Fixed 6.69 +0.02% Most stable, predictable
15-Year Fixed 5.81 +0.05% Lower rate, higher monthly payments
5-Year ARM 7.19 -0.05% Starts higher, adjustable later
7-Year ARM 7.30 -0.24% Slight drop, riskier after fixed period

ARMs tend to have higher initial rates but can adjust down/up after initial period. They might appeal to buyers planning to sell or refinance before the adjustment.

The Role of Government Loan Programs

Government-backed loans such as FHA and VA typically offer slightly lower rates, which can be attractive:

  • FHA 30-year fixed increased to 6.26%, up several basis points.
  • VA 30-year fixed at 6.25%, a modest rise.
  • These loans support buyers with lower credit scores or military service but come with specific qualification standards.

Personal Perspective: What This Means for Buyers and Refinancers

From my experience tracking mortgage trends for years, the current rate environment underscores the importance of realistic expectations. While the dream of rates dropping below 5% might be enticing, the economic realities and policies in place suggest a more tempered scenario.

If you're a buyer, locking in a rate today might protect you from future hikes, especially if the expected rate cuts are delayed or minimal.

For those refinancing, the slight dip in refinance rates is a sliver of hope—but rates remain high compared to recent history, making it essential to weigh closing costs against monthly savings carefully.

Mortgage decisions in 2025 require balancing economic forecasts, personal financial situations, and long-term housing plans carefully.

Capitalize Amid Rising Mortgage Rates

With mortgage rates expected to remain high in 2025, it’s more important than ever to focus on strategic real estate investments that offer stability and passive income.

Norada delivers turnkey rental properties in resilient markets—helping you build steady cash flow and protect your wealth from borrowing cost volatility.

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