Mortgage Rates Today July 18, 2025: 30-Year FRM Goes Down by 2 Basis Points

As of July 18, 2025, mortgage rates have decreased slightly, with the average 30-year fixed mortgage rate at approximately 6.88%, a 2-basis-point decrease. However, it's still up 4 basis points from the previous week's average rate of 6.84%. Refinance rates have also followed this trend, with the average 30-year fixed refinance rate rising to 7.21%. These rates suggest a relatively stable yet elevated mortgage rate environment compared to previous years.

Mortgage rates remain above 6%, reflecting ongoing economic factors including inflation, Federal Reserve policies, and political influences. This means homebuyers and homeowners looking to finance or refinance should expect rates to remain on the higher side through at least the remainder of 2025.

Mortgage Rates Today July 18, 2025: 30-Year FRM Goes Down by 2 Basis Points

Key Takeaways

• 30-year fixed mortgage rates are at 6.88%, down 2 basis points but an increase over last week.
• 30-year fixed refinance mortgage rates rose to 7.21%, showing upward movement.
• 15-year fixed mortgage and refinance rates also slightly increased to 5.95% and 6.03%, respectively.
• Adjustable Rate Mortgages (ARMs) like the 5-year ARM mortgage rates increased to around 7.93% (purchase) and 8.14% (refinance).
• The Federal Reserve's monetary policy, inflation, and tariffs contribute to sustained high mortgage rates.
• Experts predict rates will stay above 6% into 2026, with possible rate cuts more likely in late 2025 or beyond.

Today's Mortgage Rates Overview

Below is a summary table showing today's mortgage rates by loan type based on July 18, 2025 data from Zillow:

Loan Type	Rate (%)	Weekly Change	APR (%)	APR Weekly Change
30-Year Fixed	6.88	+0.04	7.35	+0.05
20-Year Fixed	6.86	+0.39	7.13	+0.22
15-Year Fixed	5.93	+0.04	6.23	+0.05
10-Year Fixed	6.03	+0.25	6.12	+0.14
7-Year ARM	7.63	+0.05	7.54	-0.55
5-Year ARM	7.85	-0.03	8.13	+0.01

Refinance Rates Today

Refinancing rates have similarly edged up. Here’s a breakdown of today's refinance interest rates:

Loan Type	Refinance Rate (%)	One Week Change	APR (%)	APR Weekly Change
30-Year Fixed Refi	7.21	+0.07	—	—
15-Year Fixed Refi	6.03	+0.08	—	—
5-Year ARM Refi	8.14	+0.06	—	—

This increase in refinance rates can affect homeowners who previously benefited from lower locked-in rates seeking to tap home equity or reduce monthly payments.

Understanding Why Mortgage Rates Are Currently Elevated

A blend of economic and political forces is pushing mortgage rates higher:

• Inflation: The Consumer Price Index (CPI) increased by 2.7% annually as of recent BLS data. Although this is a modest rise, it reversed earlier cooling trends, implying inflation remains a concern.
• Federal Reserve's Monetary Policy: After a series of rate cuts in late 2024, the Fed has kept benchmark interest rates steady in 2025 at 4.25%–4.5%. While cuts are anticipated later this year, many Fed officials disagree on timing, leading to an expectation of stable or slightly rising mortgage rates for now.
• Tariffs Impact: Tariffs imposed on imports have modestly pushed up prices of goods like furniture and appliances, adding to inflation pressures.
• Economic Slowdown: GDP growth is forecast at a slower 1.4% with rising unemployment to 4.5%, which may eventually lead to rate cuts but creates short-term uncertainty.
• Political Context: Comments from political leaders urging aggressive rate reductions have not swayed the Fed's cautious approach, emphasizing data-driven decisions.

Federal Reserve’s Role in Mortgage Rate Movements

The Federal Reserve influences mortgage rates primarily through its control of the federal funds rate and monetary policy signaling. The “dot plot” projections by the Fed show a median expectation of reducing the federal funds rate from the current 4.25%–4.5% to around 3.9% by the end of 2025, with further cuts anticipated in 2026 or later.

However, markets currently price in only about a 5% chance of an immediate rate cut in July 2025, expecting more action in September or October instead. This cautious stance, combined with persistent inflationary elements, explains why mortgage rates remain high and have even inched up slightly recently.

Example Calculation: Impact of Today's Mortgage Rate on Borrowers

Suppose a borrower takes out a $300,000 mortgage with a 30-year fixed rate of 6.90%.

• Monthly principal and interest payments can be calculated using the mortgage formula or an online calculator.
• By comparison, if rates were down to 6.0%, the monthly payment would be around $1,799—an almost $200/month increase, highlighting the financial impact of even small rate changes.

Comparing Today's Rates with Historical Context

Mortgage rates hovering near 7% might feel high compared to the historically low rates of the past decade, but it's important to remember rates were often above 7% in the early 2000s. The current rate environment reflects:

• Higher inflation relative to recent years.
• Fed's ongoing fight against inflation.
• Geopolitical and trade pressures influencing costs.
• A more cautious lending market post-pandemic.

While rate stability or slight increases look challenging for borrowers, homeowners with fixed-rate loans from previous low-rate eras may feel insulated but face a more expensive refinancing environment.

Why Adjustable Rate Mortgages (ARMs) are Also Trending Up

The 5-year ARM rates, both for purchases and refinances, have increased above 7.9%, reflecting similar influences affecting fixed mortgages. ARMs tend to start with lower initial rates but can adjust upward based on broader interest rate movements. The recent rise suggests lenders price in expectations of stable or rising Fed rates before cuts potentially ease borrowing costs later.

Nationwide and Regional Variations in Mortgage Rates

Mortgage rates are averages but can vary based on regions, lenders, credit scores, down payments, and loan sizes. For example:

• Conforming loans or loans meeting Fannie Mae/Freddie Mac guidelines have different structural rates than government-backed loans such as FHA or VA loans.
• Government-backed 30-year fixed FHA rates currently stand around 7.74%, higher than conventional 30-year fixed rates.
• VA loans tend to offer lower rates, with 30-year fixed VA loans around 6.38%.

Individual borrowers should shop around to get tailored quotes reflecting their financial profile.

The Economic Forecast and Mortgage Rate Trends for the Coming Months

Several respected institutions forecast mortgage rates above 6% through 2025 and into 2026:

• Fannie Mae and the Mortgage Bankers Association (MBA) expect mortgage rates to remain elevated, influenced by inflation and Fed policies.
• Economic indicators suggest inflation will keep pressure on interest rates, but a slowdown in GDP growth and a possible increase in unemployment may lead to future rate cuts.
• The Fed’s prognosis for a gradual reduction to near 2.25%–2.5% by 2027 is optimistic but will take time to materialize.

Personal Thoughts on the Current Mortgage Rate Environment

From my standpoint, today's mortgage rates reflect a market balancing inflation pressures with a Fed intent on gradual easing. These rates are uncomfortable for borrowers used to recent lows, but they are part of a broader economic recalibration. Understanding this helps borrowers and homeowners better plan financially and make informed decisions on purchasing or refinancing. The small weekly movements also remind us that mortgage rates are not static and can shift based on evolving economic data and policy announcements.