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Today’s 5-Year Adjustable Rate Mortgage Takes a Big Jump – June 26, 2025

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Are you in the market for a new home or considering refinancing? If so, keep a close eye on mortgage rates! According to Zillow, the 5-year Adjustable Rate Mortgage (ARM) has seen a significant jump today, June 26, 2025, increasing by 15 basis points to 7.71%. This increase could impact your affordability and overall borrowing strategy; let's dive into what this means for you.

Today's 5-Year Adjustable Rate Mortgage Takes a Big Jump of 15 Basis Points – June 26, 2025

Mortgage rates are constantly in flux, influenced by a myriad of economic factors. While the 30-year fixed rate is considered the benchmark, other loan products like ARMs provide different options that can be advantageous depending on your circumstances.

Here’s a snapshot of how various mortgage rates are behaving today:

  • 30-Year Fixed Rate: Down 1 basis point to 6.81%
  • 15-Year Fixed Rate: Down 2 basis points to 5.85%
  • 5-Year ARM: Up 15 basis points to 7.71%

This mixed bag of movements suggests that while long-term borrowing costs are slightly decreasing, shorter-term adjustable rates are heading in the opposite direction, potentially raising concerns for borrowers banking on rate stability.

Why the Sudden Jump in the 5-Year ARM Rate?

Several factors could be contributing to this uptick. Here are some potential drivers:

  • Shifts in the Yield Curve: The yield curve, reflecting the difference between short-term and long-term treasury yields, influences mortgage rates. A steepening curve might signal higher inflation expectations, pushing ARM rates up.
  • Federal Reserve Actions: While the Fed doesn’t directly set mortgage rates, its monetary policy decisions impact the broader interest rate environment. Any signals of tightening could lead to increases in ARM rates.
  • Investor Sentiment: Demand for mortgage-backed securities (MBS), which bundle mortgages together, also plays a role. If investors are less willing to buy MBS due to perceived risk, lenders may increase rates to compensate.
  • Economic Data Releases: Strong economic reports suggesting robust growth may encourage lenders to increase the rates they offer.

Comprehensive Mortgage Rate Overview (June 26, 2025)

To give you a complete picture, here's a detailed table comparing different loan types and their current rates from Zillow:

Conforming Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate 6.81% down 0.10% 7.25% down 0.13%
20-Year Fixed Rate 6.65% up 0.07% 6.94% down 0.01%
15-Year Fixed Rate 5.85% down 0.11% 6.13% down 0.13%
10-Year Fixed Rate 5.85% down 0.08% 6.04% down 0.03%
7-year ARM 7.44% 0.00% 8.02% up 0.20%
5-year ARM 7.71% up 0.51% 7.98% up 0.18%
3-year ARM — 0.00% — 0.00%

Government Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate FHA 6.88% down 0.45% 7.91% down 0.46%
30-Year Fixed Rate VA 6.29% down 0.12% 6.51% down 0.10%
15-Year Fixed Rate FHA 5.63% up 0.03% 6.59% up 0.03%
15-Year Fixed Rate VA 5.84% down 0.08% 6.20% down 0.05%

Jumbo Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate Jumbo 7.28% up 0.01% 7.73% up 0.06%
15-Year Fixed Rate Jumbo 6.95% up 0.35% 7.27% up 0.42%
7-year ARM Jumbo 7.42% down 0.10% 8.00% down 0.06%
5-year ARM Jumbo 7.71% down 0.01% 8.02% down 0.07%
3-year ARM Jumbo — 0.00% — 0.00%

What This Means for Homebuyers and Refinancers

The rate hike on the 5-year ARM has several implications:

  • Higher Initial Payments: Borrowers opting for a 5-year ARM will face higher initial monthly payments compared to the rate environment just yesterday. The initial attraction to ARM’s comes from a lower initial interest when compared to fixed mortgages but is diminished as the rates go up in subsequent years
  • Increased Risk: ARMs come with the risk that interest rates could rise after the initial fixed-rate period, potentially leading to significant increases in monthly payments. This risk needs careful consideration.
  • Impact on Affordability: For potential homebuyers, especially those on a tight budget, the higher ARM rate could reduce the amount they can borrow or qualify for.
  • Refinancing Considerations: Homeowners considering refinancing from a fixed-rate mortgage to an ARM need to weigh the potential savings against the risk of future rate increases.

Is an ARM Still the Right Choice?

Even with the rate increase, an ARM could still be a suitable option for certain borrowers:

  • Short-Term Homeowners: If you plan to move or refinance within the next five years, an ARM might offer lower rates during your ownership period.
  • Expectation of Decreasing Rates: Some borrowers might believe that interest rates will decline in the future, making an ARM a potentially beneficial bet. I would suggest not trying to time the market for that reason as there is no surety.
  • Financial Flexibility: If you have the flexibility to absorb potential rate increases, an ARM could still save you money in the short term. Flexibility here refers to that you should be ready in case the interest surges to a point you are not able to afford anymore to offset the monthly liability.

Fixed-Rate Mortgages: A Safe Haven?

While ARMs flirt with potential savings and risks, fixed-rate mortgages offer stability, especially now. With rates for 30-year and 15-year fixed mortgages showing slight decreases, they could be an attractive alternative for those seeking predictability in their monthly payments. The current 30-year fixed rate sits at 6.81%, a good option for stability in the long run.

Strategies to Navigate the Current Mortgage Rate Climate

  • Shop Around: Don't settle for the first rate you see. Get quotes from multiple lenders to find the best deal.
  • Improve Your Credit Score: A higher credit score can result in lower interest rates. Work on paying bills on time and reducing your debt.
  • Increase Your Down Payment: A larger down payment reduces the loan amount and could qualify you for a lower rate.
  • Consider Points: Paying points upfront can lower your interest rate. Calculate whether the upfront cost is worth the long-term savings.
  • Consult a Mortgage Professional: A mortgage broker can guide you through the options and help you make an informed decision.

The Bottom Line: Stay Informed and Adapt

The mortgage market is dynamic, and rates can change quickly. Staying informed about the latest trends and understanding how they impact your financial situation is crucial. Whether you're a first-time homebuyer, a seasoned homeowner looking to refinance, or an investor, careful planning and a well-thought-out strategy are essential to securing the best possible mortgage terms.

I'd advise approaching any mortgage decision with caution and diligence. Understanding your risk tolerance, financial goals, and the potential impact of rate changes is key to making the right choice for your 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.

HOT NEW LISTINGS JUST ADDED!

Connect with an investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

Housing Market Slowdown Hits Southern California Hard as Sales Plummet

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The Southern California housing market is showing signs of cooling. Recent data reveals that home sales have taken a dip, and price growth has slowed. While this might sound alarming, it's essential to understand the factors at play and what this means for buyers and sellers.

I've been watching the California real estate market for years, and I've seen these ebbs and flows before. Let’s take a closer look at what’s happening in Southern California.

Housing Market Slowdown Hits Southern California Hard as Sales Plummet

The Numbers Don't Lie: Sales are Down

According to the latest report from the California Association of Realtors® (C.A.R.), the Southern California region experienced a notable decline in home sales in May. Specifically, sales dropped by 7.6 percent compared to the same time last year. This decline places the region in line with a broader statewide trend, as most regions in California saw decreased home-buying activity.

To get a better grip on the local markets, here's a closer look at how individual Southern California counties performed:

  • Los Angeles: Sales decreased by 7.9%
  • Orange: Sales decreased by 16.0%
  • Riverside: Sales decreased by 8.2%
  • San Bernardino: Sales decreased by 3.3%
  • San Diego: Sales decreased by 4.6%
  • Ventura: Sales decreased by 1.2%

Why the Sales Decline? A Cocktail of Factors

Several factors are contributing to this cooling trend:

  • Lingering Economic Uncertainty: The overall economic climate remains uncertain, impacting consumer confidence. Folks are just a bit more hesitant to make big financial moves when the future feels a bit shaky.
  • Elevated Mortgage Interest Rates: While rates have come down from their peaks, they're still higher than what we saw in the recent past. This makes buying a home more expensive, directly impacting affordability.
  • Insurance Costs and Availability The rising cost and sometimes outright unavailability of homeowners insurance across parts of the state can really scare buyers.
  • Tariff Wars: Yes, they're still a factor, creating economic ripples that affect various industries and can impact real estate indirectly.

Home Prices are Leveling Off

The good news? We are seeing a shift in upward pressure on home prices. The median home price in Southern California saw a modest increase of 0.9 percent year-over-year, reaching $888,000 in May. While still an increase, this growth is notably slower than what we've seen in previous years, and even declined over the month of April as the data below shows.

Here’s a county-by-county breakdown of median home prices in Southern California:

County May 2025 % Change (Year-over-Year)
Los Angeles $835,480 +2.9%
Orange $1,419,500 -0.2%
Riverside $638,000 -1.0%
San Bernardino $497,940 +5.6%
San Diego $1,050,000 +2.4%
Ventura $985,000 +6.5%
Imperial $377,450 -6.8%

More Homes on the Market: Inventory is Up

One of the most significant shifts in the market is the increase in housing inventory. The Unsold Inventory Index (UII), which measures the number of months it would take to sell all homes on the market at the current sales rate, has been rising. In May, the UII for Southern California was 3.9 months, up from 2.7 months a year ago.

This means there are nearly 50% more homes available than there were last year and a great increase from the prior month! In real terms, this increased inventory gives buyers more choices and reduces the pressure on bidding wars.

What Does This Mean for Buyers?

If you're in the market to buy, this cooling trend could be good news:

  • More Negotiation Power: With fewer buyers and more homes on the market, you have more room to negotiate on price and terms.
  • Less Competition: You're less likely to find yourself in a bidding war, which means you can take your time and make a more informed decision.
  • Potential for Price Reductions: As inventory continues to grow, sellers may be more willing to lower their prices to attract buyers.
  • A Window of Opportunity: As C.A.R. President Heather Ozur very aptly says, “With home prices leveling off and more homes are coming onto the market, it's a great time for well-qualified buyers to enter the market”.

What Does This Mean for Sellers?

If you're thinking of selling, you might need to adjust your expectations:

  • Realistic Pricing: Overpricing your home is a surefire way to scare away potential buyers. It's crucial to price your home competitively based on current market conditions.
  • Highlight the Positives: Focus on showcasing your home's best features and making it as appealing as possible to potential buyers.
  • Be Patient: Homes are taking longer to sell. The median number of days it took to sell a home in California was 21 days in May, up from 16 days a year ago. Be prepared for a longer sales process.
  • Consider Making Some Improvements: A fresh coat of paint, updated landscaping, or minor repairs can go a long way in attracting buyers.

A Regional Perspective

It’s important to remember that real estate is hyper-local. What’s happening in Los Angeles might be different from what’s happening in San Diego. Here’s a brief overview of major regions in California:

  • Southern California: Sales down, prices up (modestly).
  • Central Coast: Sales down, prices up significantly.
  • San Francisco Bay Area: Sales down, prices down.
  • Central Valley: Sales down, prices up slightly.
  • Far North: Sales flat, prices down.

Looking Ahead: Will the Southern California Housing Market Rebound?

Predicting the future is always a risky game, but here's what the experts are saying:

  • Consumer Sentiment is Improving: C.A.R.'s Senior Vice President and Chief Economist Jordan Levine points out that consumer sentiment is showing “signs of improvment”, which could boost the housing market in the second half of the year.
  • Mortgage Rates are Key: If mortgage rates stabilize or even decline, we could see more buyers re-enter the market.
  • The Economy Matters: Overall economic growth and job creation will play a significant role in the housing market's recovery.

My Take?

I think we're entering a more balanced market, where neither buyers nor sellers have a distinct advantage. This is a good thing for the long-term health of the real estate market. While the days of rapid price appreciation may be behind us (for now), real estate remains a solid long-term investment.

As a real estate professional, I encourage everyone to keep a close eye on market trends and seek expert advice before making any decisions. Whether you're buying or selling, having the right information and guidance can make all the difference.

Key Takeaways at a Glance

To summarize, here are the key points to remember:

  • Southern California home sales are down significantly.
  • Home price growth is slowing.
  • Inventory is up, giving buyers more choices.
  • Elevated mortgage rates and economic uncertainty are contributing to the cooling trend.
  • Buyers have more negotiation power, while sellers need to price competitively.
  • Consumer sentiment may improve, potentially boosting the market in the second half of the year.

I hope this comprehensive overview helps you understand the current state of the Southern California housing market. If you have any questions or need personalized advice, don't hesitate to reach out.

Is Cape Coral the Next Florida Housing Market to Crash?

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

Is Cape Coral the Next Florida Housing Market to Crash?

What's Driving This Downturn in Cape Coral?

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

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

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

Florida's Broader Market Trends

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

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

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

Cape Coral's Specific Situation: A Deeper Dive

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

Here's what this means for Cape Coral:

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

Why is Cape Coral Hit So Hard?

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

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

What Does This Mean for Buyers and Sellers?

For Sellers:

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

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

For Buyers:

This market shift might present some opportunities for buyers.

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

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

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

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

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

Looking Ahead: What's the Forecast?

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

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

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

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

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

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

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Today’s 5-Year Adjustable Rate Mortgage Rises to 7.39% – June 25, 2025

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Are you thinking about buying a home or refinancing your mortgage? It's essential to stay up-to-date on the latest mortgage rate trends. As of today, June 25, 2025, the national average 5-year Adjustable Rate Mortgage (ARM) has risen to 7.39%. This increase of 6 basis points from 7.33% marks a notable shift in the market, and I'll break down what it means for you, whether you're a first-time buyer or a seasoned investor.

Today's 5-Year Adjustable Rate Mortgage Soars at 7.39% – June 25, 2025: What You Need to Know

With fluctuating interest rates in the market, understanding the different types of mortgages and their implications is vital. It's no secret that navigating the housing market can be confusing, and nobody wants to be swindled when making a dream purchase. So, let’s take a deep dive to gain clarity on what these numbers really mean!

Mortgage Rate Snapshot: June 25, 2025

Before going forward, it's important to understand the current mortgage market at a high level for proper context. Here's a quick look at the latest average mortgage rates from Zillow as of June 25, 2025:

  • 30-Year Fixed Rate: 6.81% (down 2 basis points from yesterday)
  • 15-Year Fixed Rate: 5.87% (stable)
  • 5-Year ARM: 7.39% (up 6 basis points)

Why the Focus on the 5-Year ARM?

You might be wondering, “Why are we focusing on the 5-year ARM in particular?”. Well, ARMs can be a strategic choice for certain homebuyers, especially when interest rates are high. But as we will soon see, they come with a distinct set of advantages and disadvantages. Understanding the nuances of ARMs can save you money and help you make a smarter financial decision when choosing a mortgage.

Understanding Adjustable Rate Mortgages (ARMs)

What is an ARM?

An Adjustable Rate Mortgage (ARM) is a type of home loan where the interest rate is not fixed for the entire loan term. Instead, it starts with an initial fixed-rate period, after which the interest rate can adjust periodically based on a benchmark index, like the Secured Overnight Financing Rate (SOFR) plus a margin.

How does a 5-Year ARM work?

A 5-year ARM has a fixed interest rate for the first five years of the loan. After that, the interest rate adjusts annually. If you get a 5-year ARM, for the initial 5 years, your interest rate will be locked. After this initial period, the rate will typically adjust once per year based on market conditions. This means your monthly mortgage payment could go up or down depending on where interest rates are at that time.

Initial Fixed Rate: As of today, June 25, 2025, the national average for a 5-year ARM is 7.39%.

Adjustment Period: After the first five years, the interest rate will adjust. The frequency of these adjustments (how often they happen) is defined in the mortgage agreement.

Index and Margin: The interest rate on an ARM is calculated by adding a margin to a specific index. The index is a benchmark rate that reflects prevailing interest rates (e.g., SOFR), and the margin is a fixed percentage point that the lender adds. The margin and index determine how much your rate adjusts.

Rate Caps: ARMs usually come with rate caps, which put a limit on how much the interest rate can increase. There are typically two types of caps:

  • Periodic Cap: Limits how much the rate can increase in a single adjustment period.
  • Lifetime Cap: Limits how much the rate can increase over the entire loan term.

These caps are designed to protect borrowers from excessively high-rate increases.

Why the Increase in 5-Year ARM Rates?

Several factors could be contributing to the rise in 5-year ARM rates. Here's my expert perspective:

  • Inflation: Persistent inflation can drive up interest rates across the board. As the cost of goods and services rises, lenders may increase rates to protect their returns. Inflation eats into money, so you can't expect them to keep lending at the same rate.
  • Economic Growth: A strong economy often leads to higher interest rates. When the economy is growing, demand for loans increases, driving up rates.
  • Federal Reserve Policy: All eyes are always on the Fed. The Federal Reserve's monetary policy decisions have a direct impact on interest rates. If the Fed raises the federal funds rate, mortgage rates typically follow suit.
  • Market Expectations: Interest rates are forward-looking, and market expectations about future economic conditions can influence current rates.

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

The big question is always: Which is superior, an ARM or a fixed-rate mortgage? Let's compare ARMs to traditional fixed-rate mortgages to help you decide which one is right for you:

Feature Adjustable Rate Mortgage (ARM) Fixed-Rate Mortgage
Interest Rate Adjustable Fixed
Initial Rate Often lower than fixed rates Higher than ARM
Rate Stability Unstable Stable
Monthly Payments Potentially fluctuating Predictable
Risk Higher Lower
Best For Short-term homeowners Long-term homeowners

When an ARM Might Be a Good Choice:

  • Short-Term Homeownership: If you only plan to stay in your home for a few years (less than 5 years), an ARM might make sense. You can take advantage of the lower initial rate and potentially sell the home before the rate adjusts.
  • Expectation of Lower Rates: If you believe interest rates will decrease in the future, an ARM could be beneficial. As rates fall, your mortgage payment could decrease.
  • Financial Flexibility: If you anticipate an increase in income in the future that will enable you to afford potentially higher mortgage payments.
  • You're comfortable with risk: You'll need to have the mental fortitude to handle market swings, be it for the better or worse.

However, I tell my friends that it may be a bad idea if they are not planning to stay in the house for a short amount of time. The danger of a higher interest rate is very real.

When a Fixed-Rate Mortgage Might Be a Better Choice:

  • Long-Term Homeownership: If you plan to stay in your home for many years, a fixed-rate mortgage offers stability and predictability.
  • Risk Aversion: If you prefer the peace of mind of knowing your mortgage payment will not change, a fixed-rate mortgage is the way to go.
  • Rising Interest Rate Environment: If you believe interest rates will rise, locking in a fixed rate now can save you money in the long run.

Current Mortgage Rate Trends

Looking more broadly, here's how other types of mortgages are performing (based on the data from Zillow):

Loan Program Rate 1W Change APR 1W Change
30-Year Fixed Rate 6.82% down 0.10% 7.35% down 0.02%
15-Year Fixed Rate 5.87% down 0.09% 6.24% down 0.03%
5-Year ARM 7.39% up 0.19% 7.99% up 0.19%

How to Navigate the Current Market

Navigating the mortgage market requires careful planning and consideration. Here's my advice:

  • Shop Around: Get quotes from multiple lenders to ensure you're getting the best rate and terms.
  • Understand the Terms: Read the fine print and fully understand the terms of your mortgage, including any fees or penalties.
  • Consider Your Financial Situation: Assess your financial situation, including your income, debt, and credit score, to determine what you can realistically afford.
  • Work with a Professional: Consult with a mortgage broker or financial advisor to get personalized advice tailored to your needs and circumstances.

The Bottom Line

The increase in the 5-year ARM rate to 7.39% on June 25, 2025, is a reminder of the dynamic nature of the mortgage market. While ARMs can be a strategic choice for some, it's essential to weigh the risks and benefits carefully. By staying informed and working with qualified professionals, you can make confident decisions that align with your financial goals.

Is the market still hot, you ask? Well in my experience, I would not compare current times to what we've seen in the past few years (2020-2023) where rates were extremely low and demand was extremely high. Instead, it's quite close if you use pre-pandemic times as a base.

Capitalize on ARM Rates Before They Rise Even Higher

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

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

HOT NEW LISTINGS JUST ADDED!

Connect with an investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

Florida Housing Market Forecast for Next 2 Years: 2025-2026

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The Florida housing market has always been a topic of interest for buyers, sellers, and investors alike. With its sunny beaches, vibrant cities, and booming tourism industry, the real estate market in the Sunshine State has seen significant growth over the years. However, with any market experiencing rapid growth, there comes the question of sustainability and the potential for a downturn.

Is Florida's housing market predicted to crash in the next two years? Experts say no. While growth may slow due to rising interest rates, Florida's demographics and rebound predictions suggest a market with staying power. Here are the latest trends in Florida's housing market.

Florida Housing Market Forecast for Next 2 Years: 2025-2026

Looking at the Florida Housing Market Forecast for Next 2 Years, I believe we're stepping into a period where the frantic energy cools down, inventory levels become much healthier, and while widespread massive price drops aren't necessarily on the horizon for the entire state, many areas will see prices stabilize or even dip slightly before finding a new equilibrium, heavily influenced by how interest rates behave.

Having watched the Florida market through multiple cycles – the booms, the corrections, and the quiet times – I've learned that few things are certain, but trends give us clues. And the trends I'm seeing right now point towards a market that's finally taking a breather after running a marathon at a sprinter's pace.

Feeling the Shift: What's Happening Right Now (Early-Mid 2025)

You don't need to be a real estate guru to sense that the market isn't quite as red-hot as it was a year or two ago. The official numbers back that up, painting a picture of a market that's definitely cooling its heels.

Based on the latest housing data released by the Florida Realtors®, Florida's housing market showed some clear signs of this slowdown:

  • Inventory is Building: This is a big one! For what feels like ages, buyers were fighting over crumbs. Now, there are actually more homes to choose from. We saw active listings increasing. For single-family homes, supply reached about a 5.6-month level in April. This is a much healthier number than the super-low levels we saw during the peak frenzy. For condos and townhouses, the build-up is even more significant, hitting a 10.3-month supply. More choices mean buyers aren't under as much pressure to bid way over asking or waive inspections just to get a foot in the door.
  • Prices are Easing (In Some Places): This is perhaps the most talked-about change. While prices are still way up from where they were before the pandemic hit, they aren't climbing like they used to. In fact, the statewide median sale price for single-family homes in April 2025 was $412,734, which was down 4% compared to April 2024. That 4% drop is actually the largest year-over-year decline we've seen since 2011! Condo and townhouse prices also saw a dip, with the median price at $315,000, down 6% year-over-year. This doesn't mean homes are suddenly “cheap,” but the relentless upward march has definitely paused, and in many areas, it's reversed slightly.
  • Sales Volume is Slower: With higher prices (even if slightly easing) and, more importantly, higher mortgage rates, fewer people are able or willing to buy right now. Closed sales for single-family homes were down 4.5% in April 2025 compared to the year before. Condo and townhouse sales took an even bigger hit, down 14.8%. This tells us that while there might be more homes available, the pool of active buyers has shrunk.

Think about what happened over the last few years. Millions of people flocked to Florida, driving demand through the roof. Builders scrambled, but couldn't keep up initially. Then, ultra-low mortgage rates made homes seem more affordable on a monthly basis, even as prices soared. It was the perfect storm for a massive price surge. Now, those dynamics have changed. Migration might be slowing slightly, building has caught up in many areas, and mortgage rates? Well, they've been the biggest game-changer.

As Dr. Brad O'Connor, the Chief Economist for Florida Realtors, put it, affordability is the “No. 1 issue impeding sales growth.” And he's absolutely right. Even if prices dip a bit, the monthly payment on a loan at 7% or 8% is dramatically higher than one at 3% or 4%. That monthly cost is what most buyers care about most.

Why Florida Might Feel the Cool Down More Than Others

The national housing market picture looks a little different than Florida's specific situation right now. According to the latest insights from Cotality (Formerly CoreLogic), nationally, home price growth has slowed, but it was still positive overall – around 2.0% year-over-year in April 2025. So, why is Florida showing negative growth (-0.8% in April 2025) while the U.S. is still positive?

This is where my personal experience observing market extremes comes in. Florida wasn't just hot; it was exceptionally hot. Many areas saw prices double or more in just a couple of years. That kind of meteoric rise is often followed by a more pronounced correction or period of stagnation compared to areas that saw more modest growth. It's like a rubber band – the further you stretch it, the harder it snaps back.

Furthermore, Florida faces unique headwinds that some other states don't, or at least not to the same degree:

  • Skyrocketing Insurance Costs: This is a major factor I hear about constantly. Homeowners insurance premiums in Florida have gone through the roof due to hurricane risks and issues within the insurance market. This adds hundreds, sometimes thousands, of dollars to the monthly cost of homeownership, making affordability even worse beyond just the mortgage payment. This burden disproportionately affects Florida homeowners compared to many other states.
  • Property Taxes: As home values soared, so did property taxes (often with a delay due to caps like the Save Our Homes amendment, but they still rise significantly over time, especially on newly purchased properties). This is another significant ongoing cost.
  • Investor Activity: Florida attracted a huge amount of investor money during the boom, both domestic and international. As the market cools and short-term rental income becomes less certain (due to increased competition and potential regulations), some investors might look to exit, adding more inventory to the market and putting downward pressure on prices, especially in popular investment areas.

Look at the list of the “coolest” markets in the U.S. right now, the places seeing the biggest price declines. According to Cotality, four out of the top five are in Florida: Cape Coral (-6.5%), Punta Gorda (-6.2%), North Port (-4.3%), and Naples (-3.7%). These are areas that experienced incredible growth, driven in part by migration and investor interest, and are now course-correcting sharply.

Even the list of the top 5 most at-risk markets in the entire U.S. are all in Florida: Cape Coral, Lakeland, North Port, St. Petersburg, and West Palm Beach. This isn't a coincidence; it reflects the severity of the preceding boom in these specific areas and the unique pressures Florida is facing.

Dr. Selma Hepp, Chief Economist at Cotality, noted that the majority of markets with annual price declines are concentrated in Florida and Texas, two states that saw massive inward migration and price run-ups. Florida's median price even dipped below the national median recently, falling out of the top 20 most expensive states – another sign of this course correction.

The Big Question: Florida Housing Market Forecast for Next 2 Years

Forecasting is always tricky, especially in a market with so many moving parts. However, based on the current data, expert opinions, and the underlying dynamics, here's how I see the Florida housing market potentially playing out over 2025 and into 2026:

Scenario 1: Mortgage Rates Stay “Higher for Longer” (Most Likely Path, at Least Initially)

If mortgage rates hover in the high 6% or 7%+ range, the trends we see now are likely to continue for the first part of this two-year window:

  • Continued Inventory Growth: More homeowners who held off selling will eventually list their properties due to life changes. New construction, while perhaps slowing slightly from its peak pace, will continue to add supply. Buyers will remain cautious due to financing costs. This means inventory levels should continue to rise, putting buyers in a stronger negotiating position.
  • Further Price Stabilization or Modest Declines: With more supply and limited demand (at current rates), competition among sellers will increase. This doesn't mean a crash, but it suggests prices will likely remain flat or see further small declines in many areas. The areas currently seeing the biggest drops (like Cape Coral, North Port, etc.) might continue to fall until they reach a level buyers find more palatable, especially considering insurance costs. Markets with less oversupply or stronger underlying local economies might fare better, seeing prices merely plateau.
  • Slow Sales Volume: Transactions will likely remain subdued compared to the boom years. Buyers who do purchase will likely be those with urgent needs, those paying cash (Florida has a high percentage of cash buyers), or those accepting the current cost of borrowing.
  • Condo Market Struggles Continue: The challenges facing the condo market – high insurance, rising association fees driven by new reserve requirements, and financing hurdles – are significant structural issues. I expect these will continue to weigh heavily on condo prices and sales volume throughout this period, potentially underperforming single-family homes statewide.

Scenario 2: Mortgage Rates Fall Towards 6% or Below (Potential for Mid- to Late-2026)

This is the wildcard, but one mentioned by both Dr. O'Connor and Dr. Hepp as a potential game-changer. If inflation comes under control and the Federal Reserve begins to cut rates, mortgage rates could drift lower. If they move towards the 6% mark or even slightly below:

  • Latent Demand Awakens: There are many potential buyers sitting on the sidelines right now, either priced out by monthly payments or simply waiting for conditions to improve. A drop in rates would significantly lower the monthly cost of homeownership, suddenly making purchasing feasible for a larger group.
  • Increased Buyer Competition: As demand picks up, the pressure on sellers would ease. While inventory might still be higher than the boom, a surge in buyer activity could start to absorb that supply.
  • Price Stabilization and Potential Modest Growth: If demand increases significantly due to lower rates, the downward pressure on prices would likely reverse. Instead of declines, we could see prices stabilize and then begin to tick upwards again, though likely at a much more sustainable pace than the 2020-2022 period. The national forecast from Cotality suggested a 4.3% national price increase between April 2025 and April 2026. If Florida's unique headwinds (insurance, taxes) don't worsen dramatically, a drop in rates could potentially help Florida start to catch up to or participate in that national trend later in the forecast window.
  • Increased Sales Volume: More buyers being able to afford homes means more transactions happening.

My Assessment for 2025-2026:

Based on the information and my own observations, my forecast leans towards a continuation of the current cooling trend through much of 2025, followed by a period of stabilization or very modest recovery in 2026, assuming interest rates either plateau or begin a gradual decline.

  • 2025: Expect more of what we're seeing now. Inventory continues to build gradually. Prices statewide likely remain flat or experience small, single-digit percentage declines, especially in the most overheated markets. Sales volume stays muted. Affordability remains the primary challenge, heavily impacted by both mortgage rates and rising insurance costs.
  • 2026: This year holds more potential variability depending on the interest rate environment.
    • If rates stay high: Continuation of 2025 trends, perhaps with slower declines as the market finds a floor.
    • If rates ease: We could see demand pick up, inventory growth slow, and prices begin to stabilize or show slight positive growth, maybe in the low single digits by the end of the year. Sales volume would increase.

I don't anticipate a market “crash” like 2008, primarily because lending standards have been much stricter this time around, and there isn't a massive overhang of distressed properties (at least not yet). This feels more like a necessary market correction and normalization after an unsustainable boom. The key difference from the national picture is that Florida's adjustment is starting from a much higher peak and is influenced by those unique Florida-specific costs like insurance.

What to Watch For

Keeping an eye on these key factors will be crucial in understanding how the forecast might shift:

  • Interest Rates: This is the single biggest lever. Watch the Federal Reserve and economic data. Any significant move down will likely inject life back into the market.
  • Inventory Levels: Is supply continuing to pile up, or are more buyers starting to absorb it? Different areas will show different trends.
  • Insurance Market Stability: If insurance costs continue to rise unchecked, it will act as a major drag on affordability and demand, even if mortgage rates fall. Reforms or stabilization here could provide unexpected support.
  • Migration Patterns: Is Florida still attracting lots of new residents, or is the pace slowing down, perhaps even seeing some outflow due to costs?
  • Job Market: A strong economy and job market support housing demand. Any weakening here could negatively impact the forecast.

Takeaway: In my opinion, this cooling period is a healthy adjustment for the Florida market. It's creating a more balanced environment after years of extreme conditions. While it might feel less exciting than the boom, it's setting the stage for potentially more sustainable growth down the road, once affordability improves, whether through lower rates, higher wages, or some combination. The next two years will be fascinating to watch unfold.

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U.S. States With Lowest Mortgage Rates Today – June 25, 2025

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If you're looking for the U.S. states with the lowest mortgage rates today, June 25, 2025, your search ends here! As of today, the states boasting the cheapest 30-year new purchase mortgage rates are Colorado, Massachusetts, New York, California, Connecticut, Washington, Maryland, and New Jersey. These states registered average rates between 6.73% and 6.81%. On the flip side, states like Alaska, West Virginia, Iowa, South Dakota, New Mexico, North Dakota, Wyoming, Alabama, and Nevada have the highest 30-year new purchase mortgage rates, ranging from 6.90% to 7.01%.

U.S. States With Lowest Mortgage Rates Today – June 25, 2025

Buying a house is a huge step, and it all starts with those mortgage rates. Let's be honest, understanding the world of mortgages can feel like trying to decipher a secret code. Rates are always changing, and they seem to depend on everything from the economy to, well, who knows what else!

That's why I'm here to break it all down for you, specifically looking at which states are offering the most attractive mortgage rates as of today, June 25, 2025. Mortgage rates can fluctuate significantly from state to state. Why the difference? Keep reading; I'll spill the tea.

Why Do Mortgage Rates Vary By State?

It's a great question because it's not something that everyone understands. I think it's crucial to know the “why's” as well as the “what's.” Here's what I've gathered over time:

  • Different Lenders: Not every lender operates in every state. This means the playing field is different depending on where you are buying. More competition can lead to more favorable rates.
  • Credit Scores: Average credit scores can vary across states. States with higher average credit scores might see slightly better rates overall.
  • Average Loan Size: The size of the average mortgage can also play a role. Large loans may carry different interest rates than smaller loans.
  • State Regulations: Each state has different regulations affecting the mortgage industry. This can influence how lenders operate and, in turn, the rates they offer.
  • Risk Management: Lenders each have their own risk management strategies. Some lenders might be more willing to offer lower rates in certain areas than others.

Here's a quick table summarizing the reasons:

Factor How It Affects Mortgage Rates
Lender Variety More competition can lead to lower rates
Credit Scores Higher averages generally mean better rates
Loan Size Can affect the risk calculation for the lender
State Regulations Influences lender operations and rate offerings
Risk Management Individual lender strategies impact offered rates

The Good News: States With Lower Mortgage Rates

Alright, let's talk about the good stuff. According to a report by Investopedia, as of today, June 25, 2025, these states are offering some of the most competitive 30-year new purchase mortgage rates:

  • Colorado: Historically, Colorado has a booming real estate, so it's not surprising that it is on the list.
  • Massachusetts: This is an attractive state for many to buy new homes.
  • New York: I wouldn't have expected New York to be on this list.
  • California: Similar to Colorado, California has good real estate, even though it is a bit more expensive to buy there.
  • Connecticut: It is nice to be in New England, so I don't think it is so surprising.
  • Washington: The Pacific Northwest is a beautiful area.
  • Maryland: Mid-Atlantic is a hotspot.
  • New Jersey: It is interesting to see both New York and New Jersey on these list. These are usually known to be higher-rate states.

These states have average rates hovering between 6.73% and 6.81%.

The Other Side: States With Higher Mortgage Rates

Now for the not-so-great news. These states are currently showing the highest 30-year new purchase mortgage rates:

  • Alaska
  • West Virginia
  • Iowa
  • South Dakota
  • New Mexico
  • North Dakota
  • Wyoming
  • Alabama
  • Nevada

In these states, rates are averaging between 6.90% and 7.01%.

National Mortgage Rate Trends: A Rollercoaster Ride

Let’s zoom out and look at the big picture. According to the Investopedia report, national mortgage rates have been on something of a rollercoaster. Just today, June 25, 2025, rates on 30-year new purchase mortgages fell by 2 basis points, making it a total drop of 7 basis points over the past two days. The average is now at 6.84%, the lowest it's been since April 4th! It's quite the contrast to mid-May, where rates reached a yearly high of 7.15%.

Digging deeper, March 2025 saw rates dip to 6.50%, the lowest average for the year. But the real standout was September of last year when rates bottomed out at a two-year low of 5.89%. Talk about variance!

A Word of Caution About “Teaser Rates”

It's tempting to jump on those super-low rates you see advertised online. We've all been there! But here’s a little insider info: those are often teaser rates. As Investopedia rightly mentions, these “cherry-picked” rates might require you to pay points upfront or might only be available to borrowers with pristine credit and smaller-than-average loans. The rate you ultimately get will depend on your unique financial situation, including your credit score, income, and other factors.

Pro-Tip: ALWAYS Shop Around!

Let me give you some advice – ALWAYS shop around for the best mortgage rates! Seriously, don’t settle for the first offer you get. Shopping around allows you to compare offers from different lenders, potentially saving you thousands of dollars over the life of your loan. With websites such as Zillow, it seems to make life so much easier. Don’t leave money on the table because you don’t feel like putting in the effort.

What's Driving These Rate Changes?

Mortgage rates aren't just pulled out of thin air. Several factors influence them:

  • The Bond Market: Keep an eye on 10-year Treasury yields. These have a significant impact on mortgage rates.
  • The Federal Reserve: The Fed's monetary policy, especially bond-buying programs, plays a crucial role.
  • Lender Competition: The more lenders compete, the better the rates for you.

It's tough to pinpoint one single cause for rate changes because these factors often move together. For much of 2021, the Fed's response to the pandemic kept rates low. But since then, they've been adjusting course, leading to some pretty wild swings.

Looking Ahead: What's Next for Mortgage Rates?

Predicting the future is never easy, especially regarding mortgage rates. But here's what I'm watching. In the past, the Fed aggressively raised rates to combat inflation. However, recently, the Fed has been more cautious, even hinting at potential rate cuts down the line. With eight rate-setting meetings scheduled each year, we could see multiple announcements about holding rates steady throughout 2025.

Understanding How Your Credit Score Messes With Rates

If you want to get a mortgage, you want a higher credit score, but it's easier said than done! The better your credit score, the lower the mortgage rate a lender is likely to offer. Experian says the best rates generally go to those with scores of 760 or higher. Aim for a VantageScore of 780 or higher for the best mortgage rates available. The takeaway here is: if you can't improve your credit rating, you need to find a good co-signer or consider renting; it might give you more time to save up for a bigger downpayment.

Calculate Your Monthly Mortgage Payment

Want to get a sense of what your monthly mortgage payments might look like? Here's a breakdown, based on a home price of $440,000 and a 20% down payment:

  • Home Price: $440,000
  • Down Payment: $88,000 (20%)
  • Loan Term: 30 years
  • APR: 6.67%

Based on these figures, your estimated monthly payment would be around $2,649.04. That includes $2,264.38 for principal and interest, $256.67 for property taxes, and $128.00 for homeowners insurance. It's also important to understand that over the life of the loan, you'll pay a significant amount of interest. In this scenario, the total mortgage interest paid would be $463,176.16, bringing the total amount paid to $815,176.16. Again keep in mind that these numbers are all estimates, if you have a variable interest rate.

Final Thoughts: Navigating the world of mortgage rates can be tricky, but understanding the factors that influence them can help you make informed decisions. Keep an eye on economic trends, shop around for the best rates, and don't be afraid to ask questions. Happy house hunting!

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Mortgage Rates Today June 25, 2025: Rates Drop Across the Board, Offering Significant Savings

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As of June 25, 2025, mortgage rates have seen a slight decrease, providing potential homeowners and those looking to refinance a bit of financial reprieve. The national average for a 30-year fixed mortgage rate stands at 6.81%, a dip from 6.83% the day before. This drop reflects a larger picture where rates were at 6.91% just a week earlier. For many, this drop in rates could mean significant savings in monthly payments and overall interest expenses.

Mortgage Rates Today – June 25, 2025: Rates Drop Across the Board

Key Takeaways:

  • The national average rate for a 30-year fixed mortgage is 6.81%, down from 6.91% last week.
  • 15-year fixed mortgage rates are stable at 5.87%.
  • The 5-year ARM rate has increased to 7.39%.
  • National refinance rates for the 30-year fixed loan are currently approximately 7.10%.
  • Predictions suggest that mortgage rates may hover around the mid-6% range for the remainder of 2025.

Current Mortgage Rates Overview

Understanding today’s mortgage rates involves exploring various loan types available in the market. Here’s how the current mortgage rates stack up as of June 25, 2025:

Loan Type Current Rate 1 Week Change APR 1 Week Change
30-Year Fixed Rate 6.81% -0.02% 7.35% -0.02%
20-Year Fixed Rate 6.51% -0.07% 7.01% +0.06%
15-Year Fixed Rate 5.87% -0.09% 6.24% -0.03%
10-Year Fixed Rate 5.85% -0.08% 6.04% -0.03%
7-Year ARM 7.44% 0.00% 8.02% +0.20%
5-Year ARM 7.39% +0.19% 7.99% +0.19%

(Source: Zillow, June 25, 2025)

Current Refinance Rates

If you’re considering refinancing your home loan, the current offer provides an array of rates you might find accommodating. National refinance rates have remained relatively stable, making it a good time for many homeowners. Here is a breakdown of the current refinance rates:

Loan Type Current Rate 1 Week Change APR 1 Week Change
30-Year Fixed Rate 7.10% -0.06% 7.33% -0.04%
15-Year Fixed Rate 6.01% +0.08% 6.22% -0.04%
5-Year ARM 8.04% +0.11% 8.25% +0.15%

Monthly Mortgage Payments Based on Current Rates

When it comes to buying a home, understanding how mortgage rates translate into your budget is essential. Here, we present estimates for monthly payments based on the current rate of 6.81% for a 30-year fixed mortgage.

Monthly Payment on a $300,000 Mortgage

For a typical $300,000 mortgage, the estimated monthly payment (excluding taxes and insurance) at 6.81% is approximately $1,946. In the early years of a mortgage, most of the payment goes toward interest, meaning a significant portion of your expenses is primarily interest.

Monthly Payment on a $400,000 Mortgage

Now, moving to a $400,000 mortgage, at the same interest rate, results in an estimated monthly payment of about $2,595. This amount underlines the financial responsibility of homeownership and emphasizes the necessity for a well-planned budget.

Monthly Payment on a $500,000 Mortgage

For those considering a larger purchase, the monthly payment for a $500,000 mortgage would be approximately $3,243. Larger loans mean larger financial commitments, stressing the importance of understanding one’s budget and potential costs.

Mortgage Amount Estimated Monthly Payment
$300,000 $1,946
$400,000 $2,595
$500,000 $3,243

Understanding the Impacts of Interest Rates on Homeownership

The fluctuations in mortgage rates can significantly impact prospective buyers. As home prices have risen over the past few years in many markets, the cost of borrowing needs to be considered in conjunction with property prices. An increase in interest rates can mean a drastically altered monthly payment. If rates rise while home prices remain steady or increase, many potential buyers may find themselves priced out of the market.

Impact of Interest Rate Changes:

  • Affordability: Increased rates mean higher monthly payments, which can squeeze budgets, making homes less affordable.
  • Buying Power: A drop in rates could improve buying power, allowing individuals to consider homes that were previously beyond their financial reach.

Additionally, individuals should be aware of how these changes affect their ability to refinance. Lower rates can also encourage current homeowners to lock in better terms than before, solidifying their financial health.

Are Mortgage Rates Expected to Go Down?

The future of mortgage rates is uncertain, but several analysts predict that rates may stabilize or see a modest decrease. According to the National Association of REALTORS® (NAR), home sales are expected to rise significantly in 2025, which could create a more favorable environment for buyers. Lawrence Yun, the chief economist of NAR, has indicated that the second half of 2025 might average mortgage rates around 6.4%, which would further boost affordability.

In contrast, the Mortgage Bankers Association suggests rates could remain steady in the mid-6% range as inflation continues to be a concern, potentially pushing rates back up towards the end of the year. The interplay of economic factors means that predictions vary widely. These fluctuations showcase the complexities of the current mortgage landscape.

Current Economic Indicators Affecting Mortgage Rates

Economic indicators also play a crucial role in shaping mortgage rates. When the U.S. economy heads into a downturn or uncertainty arises, rates can fall, stimulating buying activity. Some key economic indicators to remain aware of are:

  1. Inflation Rates: High inflation can lead to increased interest rates as lenders aim to maintain their profit margins.
  2. Employment Rates: Strong employment numbers can boost consumer confidence, potentially driving home sales up and affecting rates positively.
  3. The Federal Reserve’s Actions: Decisions made by the Federal Reserve regarding interest rates set the tone for all other rates in the economy, including mortgages.

Final Thoughts on Current Mortgage Rates

Staying informed about today’s mortgage rates is vital for those looking to purchase a home or refinance. The slight decrease can open more doors for potential buyers. It’s essential to grasp how these rates influence monthly payments and the overall affordability of homeownership. Each decision in this arena should be made with careful consideration of current economic conditions, individual financial circumstances, and forecasts about future rates.

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U.S. States With Lowest Mortgage Rates Today – June 24, 2025

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Looking for the states where you can snag the best deal on a mortgage right now? As of today, June 24, 2025, the U.S. states with the lowest mortgage rates for a 30-year new purchase are Colorado, Massachusetts, New York, Utah, California, Virginia, Washington, and Maryland, with rates averaging between 6.77% and 6.81%.

U.S. States With Lowest Mortgage Rates Today – June 24, 2025

Buying a home is a huge decision, and understanding mortgage rates is a critical part of the process. I know, it can feel overwhelming, but don't worry, I'm here to break it down for you. Mortgage rates are constantly in flux, influenced by a whole host of economic factors. And they can vary significantly from state to state, so it's crucial to stay informed to find the best deal for you.

Why Do Mortgage Rates Vary By State?

It's a fair question. Why doesn't everyone just get the same rate, no matter where they live? Well, several factors contribute to these state-level differences. Mortgage rates vary by state primarily because:

  • Lender Presence: Not all lenders operate in every state. This means competition can be stronger in some areas than others, and that competition can drive rates down.
  • Credit Score Variations: Average credit scores differ from state to state. Lenders will perceive different levels of risk depending on the creditworthiness of a specific state’s population.
  • Average Loan Size: Just as credit scores may differ, the average loan size can also be impacted by differing states. This could also affect the lender.
  • State Regulations: Mortgage regulations aren't uniform across the country. Some states have stricter rules than others, which can impact lenders' costs and, ultimately, the rates they offer.
  • Risk Management: Lenders each have different risk management tactics that can influence the rates they offer.

Think of it like this: imagine two grocery stores in different towns. One town has more competition and stricter regulations on food safety, while the other doesn't. The store in the more competitive, regulated town might have to offer lower prices and higher quality to attract customers. Mortgage rates work in a similar way.

The Best and Worst: A State-by-State Breakdown

As Investopedia's report highlights, let's dive deeper into which states are offering the best and least attractive mortgage rates right now.

States with the Lowest 30-Year New Purchase Mortgage Rates:

State Average Rate
Colorado 6.77%
Massachusetts 6.78%
New York 6.79%
Utah 6.79%
California 6.80%
Virginia 6.80%
Washington 6.80%
Maryland 6.81%

States with the Highest 30-Year New Purchase Mortgage Rates:

State Average Rate
Alaska 6.93%
West Virginia 6.95%
North Dakota 6.96%
Iowa 6.97%
Kansas 6.99%
Maine 7.00%
Mississippi 7.00%
Nebraska 7.01%
Vermont 7.02%

Keep in mind that these are averages. Your individual rate could differ based on your unique financial situation.

What About National Mortgage Rate Averages?

While it's interesting to see state-level differences, it's also important to keep an eye on the national picture. According to recent data, the national average for a 30-year new purchase mortgage has fallen to 6.86% today, a two-and-a-half-month low. This is a welcome change from the 7.15% peak we saw in mid-May 2025.

Here's a quick snapshot of national averages for different loan types:

  • 30-Year Fixed: 6.86%
  • FHA 30-Year Fixed: 7.55%
  • 15-Year Fixed: 5.88%
  • Jumbo 30-Year Fixed: 6.81%
  • 5/6 ARM: 7.09%

As you can see, there's a range of options, each with its own pros and cons. Deciding which loan is right for you requires weighing your short-term and long-term financials, your long-term housing goals, and level of risk tolerance.

Don't Get Duped by “Teaser Rates”

You've probably seen super-low mortgage rates advertised online. These are often called “teaser rates,” and they can be misleading. Investopedia points out that these rates are often “cherry-picked” as the most attractive, and they might come with hidden costs or strict requirements.

For example, some teaser rates require you to pay “points” upfront (each point is 1% of the loan amount). Others might be based on a borrower with a near-perfect credit score or a smaller-than-typical loan amount.

The rate you ultimately secure will be based on factors like your credit score, income, and more. So, it can vary significantly from the averages you see here.

What's Driving These Rate Changes?

Understanding why mortgage rates go up or down can help you make smarter decisions about when to buy or refinance. Several factors are at play:

  • The Bond Market: Mortgage rates tend to follow the direction of the bond market, especially yields on 10-year Treasury bonds. When bond yields rise, mortgage rates usually follow suit.
  • The Federal Reserve: The Fed's monetary policy has a big impact. The Fed influences mortgage rates through bond buying and funding government-backed mortgages.
  • Competition: The level of competition between mortgage lenders can also affect rates. When lenders are competing fiercely for business, they may lower rates to attract borrowers.

The Fed Factor: What's the Latest?

The Federal Reserve's actions play a particularly important role in the mortgage market.

After aggressively raising interest rates in 2022 and 2023 to combat decades-high inflation, the Fed paused rate hikes for a while. In September 2024, they decreased the rate. In 2025, the Fed continued on its previous path of holding rates steady, reflecting caution about the ongoing economic situation.

These actions, directly and indirectly, influence mortgage rates. Even though the fed funds rate often does not directly influence mortgage rates, they do tend to move in similar directions. Economists keep a close eye on the actions that the Federal Reserve undertakes to get an idea of where rates will go in the future.

What About the Future? Expert Predictions

What does 2025 and beyond hold for mortgage rates? According to Fannie Mae's Forecast, mortgage rates are predicted to end 2025 at 6.5% and 2026 at 6.1%.

Keep in mind that these are just forecasts, and the future is never certain. Economic conditions can change quickly, throwing even the best predictions off course.

My Advice: Shop Around and Be Prepared

So, what's the takeaway?

  • Mortgage rates vary by state. Don't assume that the national average applies to you.
  • “Teaser rates” can be misleading. Focus on the rate you're actually offered, not the one advertised online.
  • Stay informed about economic trends and the Federal Reserve's actions.
  • Get pre-approved: This will give you a clear idea of how much you can borrow and what interest rate you can expect.
  • Don't be afraid to negotiate. Mortgage lenders want your business, so see if you can negotiate a better rate or terms.

As someone who has been in the real estate business for 20+ years, I always tell people, “Knowledge is power,” and when it comes to mortgages, that's especially true. Good luck with your home-buying journey!

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Today’s 5-Year Adjustable Rate Mortgage Soars by 17 Basis Points – June 24, 2025

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Mortgage rates can feel like a rollercoaster, and understanding the options can be overwhelming. As of today, June 24, 2025, the national average 5-year Adjustable Rate Mortgage (ARM) rate stands at 7.25%. This article will explore what that means for you, diving deep into the pros and cons of a 5-year ARM, and helping you decide if it's the right path to homeownership or refinancing.

Today's 5-Year Adjustable Rate Mortgage Soars by 17 Basis Points – June 24, 2025

Buying a home is a huge decision, and choosing the right mortgage is just as critical. You've probably heard about fixed-rate mortgages, but Adjustable Rate Mortgages (ARMs) offer something different. Let's be honest, the mortgage world can be confusing. It's tempting to just grab the first option that seems reasonable, but understanding the nuances – especially with ARMs – can save you serious money and stress in the long run. I've seen firsthand how borrowers who take the time to understand their options end up in a much better financial situation.

What Exactly is a 5-Year ARM?

A 5-year ARM is a type of mortgage where the interest rate is fixed for the first five years and then adjusts periodically, usually once a year, based on prevailing market conditions.

Here's the breakdown:

  • Fixed-Rate Period: For the first five years, you'll enjoy the stability of a fixed interest rate and consistent monthly payments. This is the “honeymoon” phase!
  • Adjustment Period: After the initial five years, your interest rate will adjust based on an index, such as the Secured Overnight Financing Rate (SOFR) plus a margin (a fixed percentage added by the lender).
  • Rate Caps: ARMs typically have rate caps that limit how much the interest rate can increase at each adjustment period and over the life of the loan. These caps offer some protection against drastic rate hikes.

Current Mortgage Rate Snapshot: June 24, 2025

Before we delve deeper into 5-year ARMs, let's take a look at where the broader mortgage market stands today:

Loan Program Rate 1 Week Change APR 1 Week Change
30-Year Fixed Rate 6.83% Down 0.08% 7.29% Down 0.08%
20-Year Fixed Rate 6.51% Down 0.07% 7.01% Up 0.06%
15-Year Fixed Rate 5.87% Down 0.09% 6.17% Down 0.09%
10-Year Fixed Rate 5.85% Down 0.08% 6.04% Down 0.03%
7-Year ARM 7.44% 0.00% 8.02% Up 0.20%
5-Year ARM 7.25% Up 0.17% 7.85% Up 0.17%
3-Year ARM — 0.00% — 0.00%

Source: Zillow

Why Consider a 5-Year ARM? Weighing the Pros

Even though the rates are higher than the 30 year and 15 year fixed, there are some valid reasons for using these ARMs.

  • Lower Initial Interest Rate: Historically, 5-year ARMs often start with a lower interest rate compared to 30-year fixed-rate mortgages. While today's rate of 7.25% is higher than the 30-year fixed-rate of 6.83% and 15-year fixed rate of 5.87% the difference sometimes can be a financial draw.
  • Potential Savings: If interest rates remain stable or decrease during the initial fixed-rate period and beyond, you could save money on interest payments over the life of the loan.
  • Flexibility: A 5-year ARM can be a good option if you plan to move or refinance within five years. You're not locked into a long-term commitment at a higher rate if rates were to drop.
  • Investment Opportunities: The potential savings from a lower initial rate could be invested elsewhere, potentially generating a higher return than the interest saved.

The Other Side of the Coin: The Cons of a 5-Year ARM

It's not all sunshine and roses. There are risks involved:

  • Interest Rate Risk: The biggest risk is that interest rates could rise after the fixed-rate period ends, leading to higher monthly payments.
  • Complexity: ARMs can be more complex than fixed-rate mortgages, making it harder to understand the potential risks and benefits.
  • Uncertainty: Predicting future interest rates is nearly impossible. You could be gambling on market conditions.
  • Refinancing Risk: If interest rates rise significantly, refinancing might not be an option, leaving you stuck with a higher rate.

Who Should Consider a 5-Year ARM?

A 5-year ARM might be a suitable option for you if:

  • You Plan to Move Soon: If you anticipate moving within the next five years, you can take advantage of the lower initial rate without worrying about long-term rate adjustments.
  • You Expect Your Income to Increase: If you expect your income to increase significantly in the coming years, you might be able to absorb potential rate increases.
  • You're Comfortable with Risk: If you're comfortable with the possibility of rising interest rates and higher monthly payments, a 5-year ARM could be a good option.
  • You Have a Solid Financial Plan: Make sure you have a plan B in case you have to refinance.

Factors Influencing ARM Rates

Several factors influence 5-year ARM rates:

  • Federal Reserve Policy: The Federal Reserve's monetary policy decisions, particularly its decisions on interest rates, have a significant impact on mortgage rates.
  • Economic Growth: A strong economy typically leads to higher interest rates, while a weak economy can lead to lower rates.
  • Inflation: High inflation can push interest rates higher as lenders demand a higher return to compensate for the erosion of purchasing power.
  • Global Events: Global events, such as political instability or economic crises, can also influence mortgage rates.

What to Ask Your Lender

If you're considering a 5-year ARM, be sure to ask your lender these crucial questions:

  • What is the index used to determine the interest rate adjustment?
  • What is the margin added to the index?
  • What are the rate caps (both periodic and lifetime)?
  • How often will the interest rate adjust?
  • What is the worst-case scenario for my monthly payments?

5-Year ARM vs. Other Loan Types: A Quick Comparison

To make a better decision, let's compare the 5-year ARM to other common mortgage options:

Loan Type Interest Rate Payment Stability Risk Level Best For
5-Year ARM Initially Lower Fixed for 5 years, then adjusts Moderate Those planning to move or refinance within 5 years, comfortable with some risk
30-Year Fixed Higher Fixed for 30 years Low Those seeking payment stability and long-term security
15-Year Fixed Lower Fixed for 15 years Low Those who want to pay off their mortgage quickly and save on interest, but can afford higher monthly payments

My Personal Take: Proceed with Caution

In my experience, 5-year ARMs can be a useful tool, but they're not for everyone. I always advise potential borrowers to carefully assess their risk tolerance, financial situation, and long-term plans before opting for an ARM. Understand the math and don’t get seduced by the lower initial rate if you are not confident about handling future adjustments.

Conclusion:

Deciding whether or not to choose a 5-year ARM on June 24, 2025, or any other day for that matter, depends entirely on your individual circumstances. Weigh the pros and cons, understand the risks, and seek advice from a qualified mortgage professional. Armed with knowledge, you can make a confident decision that aligns with your financial goals.

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.

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15 Housing Markets Facing the Steepest Decline in Home Prices

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Thinking about buying or selling a home? The housing market is always a hot topic, and right now, it's even more interesting. Several factors are at play, from mortgage rates to the availability of homes, and these are all impacting where prices are headed. According to the latest projections, while some markets are expected to remain stable or even increase in value, others are facing potential price declines. So, where are home values expected to drop the most?

Based on current forecasts, the 15 housing markets set for the biggest price decline over the next year are primarily concentrated in the South, with Mississippi and Texas leading the way. These markets could see significant drops in home values, presenting both challenges and opportunities for buyers and sellers. Let’s explore these markets and what the future might hold.

Why the Housing Market is Shifting

Before we get into the specific markets, it's important to understand the bigger picture. Several factors are contributing to the anticipated price declines in certain areas. The two key factors seem to be rising inventory and high-interest rates.

  • Rising Housing Inventory: More homes on the market mean more options for buyers, and that naturally puts downward pressure on prices. As sellers return to the market, they may need to lower their prices to attract buyers.
  • Elevated Mortgage Rates: High mortgage rates make buying a home more expensive. When borrowing money costs more, fewer people can afford to buy. This decreases demand, which can lead to price drops.
  • Labor Market Concerns: Uncertainty about jobs and the overall economy can also impact the housing market. If people are worried about losing their jobs, they're less likely to make big purchases like homes. This reduced confidence further cools the market.

Zillow's latest forecast predicts a 1.4% dip in home values this year, mainly due to the increase in available homes. This forecast is in line with what they projected last month, indicating a consistent trend. While sales are expected to rise by 1.9% compared to 2024, this increase isn't enough to offset the impact of higher inventory on prices.

15 Housing Markets Facing the Steepest Decline in Home Prices

Okay, let's break down the 15 metropolitan statistical areas (MSAs) predicted to see the biggest home price drops, according to the latest data from Zillow:

Region Name Region Type State Name Price Change (June 30, 2025) Price Change (August 31, 2025) Price Change (May 31, 2026)
Greenville, MS msa MS -2.6% -5.5% -15%
Pecos, TX msa TX -1.5% -3.8% -14.2%
Clarksdale, MS msa MS -3.1% -7.3% -13.6%
Cleveland, MS msa MS -2% -5.1% -13.4%
Bennettsville, SC msa SC -3% -6% -12.9%
Raymondville, TX msa TX -2.1% -4.9% -12.1%
Opelousas, LA msa LA -1.9% -4.6% -11.6%
Morgan City, LA msa LA -2.6% -5.7% -10.6%
Big Spring, TX msa TX -0.4% -2.2% -10.5%
Natchez, MS msa LA -2.6% -5.3% -10.3%
Zapata, TX msa TX -1.8% -3.5% -10.3%
Helena, AR msa AR -1% -2.1% -10.2%
Indianola, MS msa MS -2.6% -4.9% -10.1%
Johnstown, PA msa PA -1.6% -4.5% -10%
Hobbs, NM msa NM -0.5% -1.7% -10%

Let's take a closer look at each of these areas.

Deep Dive into the Declining Housing Markets

Here’s a closer look at what might be causing the downturn in these particular regions:

  1. Greenville, MS: Located in the Mississippi Delta, Greenville's economy is heavily reliant on agriculture. Fluctuations in commodity prices and agricultural yields can significantly impact the housing market. The projected 15% decline by May 2026 suggests deeper economic challenges in the area.
  2. Pecos, TX: Pecos has seen rapid growth due to the energy sector, particularly oil and gas. However, this growth is volatile and directly tied to commodity prices. A 14.2% decline indicates cooling in the energy sector may be impacting housing demand.
  3. Clarksdale, MS: Clarksdale, known as the “Home of the Blues,” faces similar economic challenges as other Mississippi Delta regions. A high poverty rate and limited job opportunities may be driving the projected 13.6% price decline.
  4. Cleveland, MS: Like its neighboring cities in Mississippi, Cleveland's economy is also challenged. Limited economic opportunities and slow population growth result in a predicted drop of 13.4%.
  5. Bennettsville, SC: Bennettsville is a smaller market facing economic headwinds related to declining manufacturing and limited diversification in employment opportunities that could be causing a 12.9% drop.
  6. Raymondville, TX: Located near the Texas-Mexico border, Raymondville's economy is tied to international trade and agriculture. Economic uncertainties related to trade policies and weather-related agriculture risks could explain the 12.1% decline.
  7. Opelousas, LA: Opelousas, a small city in Louisiana, faces challenges common to rural areas, including limited job growth and aging infrastructure. The 11.6% decrease reflects these underlying economic issues.
  8. Morgan City, LA: Reliant on the oil and gas industry, Morgan City faces volatility with energy market fluctuations. A 10.6% drop would suggest the oil market is softening here.
  9. Big Spring, TX: Another Texas city dependent on the energy industry, Big Spring's housing market is susceptible to the ups and downs of oil prices. The 10.5% decline may stem from reduced activity in the oil fields.
  10. Natchez, MS: Natchez, known for its historic homes and tourism, is still a smaller market in a state with broader economic challenges. A 10.3% decline may signify deeper problems than just high-interest rates.
  11. Zapata, TX: Zapata's proximity to the border makes it vulnerable to trade fluctuations and economic policies impacting cross-border activities. A 10.3% drop in housing could reflect these vulnerabilities.
  12. Helena, AR: Helena faces significant economic hardships, including high unemployment and poverty rates, which have had a profound effect on the value of the housing market leading to projected losses of 10.2%.
  13. Indianola, MS: Indianola, like other Mississippi Delta cities, struggles with limited economic diversification and a shrinking population. A 10.1% decline illustrates the broader economic struggles of the region.
  14. Johnstown, PA: Johnstown, located in southwestern Pennsylvania, has been grappling with a shrinking population and a shift away from its historical industrial base. With a projected dip of 10% there could be opportunities for new growth in other markets.
  15. Hobbs, NM: Hobbs, located in southeastern New Mexico, is part of the Permian Basin, a significant oil and gas production region. A 10% decline would imply that this is not a market where growth is expected in the near future.

What Does This Mean for You?

The potential price declines in these markets present both opportunities and risks, depending on your situation:

  • For Buyers: If you're looking to buy in these areas, you might be able to negotiate a better price or find more affordable options. However, be aware that these markets may face economic challenges. Do your research!
  • For Sellers: If you're selling, it's important to be realistic about pricing. You might need to lower your expectations and be prepared to wait longer to sell your home.
  • For Investors: These markets could offer investment opportunities if you're willing to take on the risk. Buying low and holding for the long term could pay off if these areas experience an economic turnaround. But thorough due diligence is crucial.

Final Thoughts

While these forecasts give us a glimpse into what might happen over the next year, the real estate market is complex and can change quickly. Various factors that go into prices of real estate change more frequently than any one can predict. Staying informed, doing your own research, and consulting with real estate professionals can help you to navigate these trends and make smart decisions!

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