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Mortgage Rates Predictions 2026 by Warren Buffett’s Berkshire Hathaway

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

Mortgage Rates Predictions 2026 by Warren Buffett’s Berkshire Hathaway

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

Understanding the Current Uncertainty

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

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

The Experts Weigh In: When Will We See Relief?

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

Recent Rate Drops and the Fed's Role

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

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

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

Cautious Optimism for 2026

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

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

Forecast Breakdown: Who's Saying What?

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

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

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

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

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

What's Happening with Home Inventory?

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

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

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

My Takeaway for Homebuyers

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

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

Key Takeaways

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

What to do Now

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

Final Thoughts:

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

Capitalize Amid Rising Mortgage Rates

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

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

HOT NEW LISTINGS JUST ADDED!

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

(800) 611‑3060

Get Started Now

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

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

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

A Snapshot of Today's Mortgage Rates

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

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

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

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

Source: Zillow – August 19, 2025

Why Focus on ARMs?

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

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

The Federal Reserve's Influence: A Deep Dive

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

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

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

Economic Factors at Play in 2025

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

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

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

Why a September Rate Cut Is Likely

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

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

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

How a Rate Cut Will Impact Mortgage Rates

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

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

What to Watch Out For

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

Key Dates and Scenarios

Here are some important dates to keep in mind:

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

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

What This Means for You

Here’s how these trends might affect different people:

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

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

Capitalize on ARM Rates Before They Rise Even Higher

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

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

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Connect with an investment counselor today (No Obligation):

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

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

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

Looking Back: How Rates Got So Low

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

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

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

Where Are We Now? (August 2025)

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

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

This chart shows how rates have changed over time:

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

What's Driving Mortgage Rates Now?

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

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

What the Experts Say

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

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

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

How This Affects the Housing Market

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

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

Here's What You Can Do

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

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

The Bottom Line: Be Realistic

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

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

Capitalize Amid Rising Mortgage Rates

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

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

HOT NEW LISTINGS JUST ADDED!

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

(800) 611‑3060

Get Started Now

How Much Will Mortgage Rates Drop Further in August 2025?

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Trying to time the market, especially when it comes to something as big as a mortgage, can feel like trying to predict the weather. Will it be sunny skies and low rates, or stormy weather and high costs? If you're wondering, “Will mortgage rates drop further in August 2025?” the answer is probably not drastically. While a slight dip is possible, most experts believe rates will hover between 6.5% and 6.6%. Let's explore why that is and what factors could shift things one way or the other.

How Much Will Mortgage Rates Drop Further in August 2025?

The Current Situation: Where Mortgage Rates Stand Today

As of mid-August 2025, mortgage rates fell to their lowest level since October and purchase application activity is improving as borrowers take advantage of the decline in rates. Getting a mortgage today means dealing with interest rates that are higher than what we saw a few years ago. According to the Primary Mortgage Market Survey® by Freddie Mac, the average 30-year fixed-rate mortgage (FRM) is around 6.58%.

To really get a feel for this, look at the numbers:

  • 30-Year FRM: 6.58% (Slightly up from last year)
  • 15-Year FRM: 5.71% (A bit better, but you pay more each month)
  • Recent Range: Between 6.08% and 7.04% over the past year

While some might call it stable, “stable” at mid-6% can be a challenge for a lot of people who are trying to buy a home. This makes it tricky. I remember helping my cousin buy his first house in 2021 when the rates were crazy low. He got a steal. Now, it’s a whole different ball game, and that’s why understanding future predictions is important.

Looking Back: A Quick History of Mortgage Rate Swings

Why are rates where they are today? To understand that, we need to take a little trip down memory lane.

  • 2020-2021: The Pandemic Plunge. When COVID-19 hit, the Federal Reserve stepped in and cut interest rates to near-zero. Mortgage rates followed suit, dropping to historical lows. It’s like they were practically giving money away! I remember thinking I should refinance just because, even though I had only bought my house a year before.
  • 2022-2023: The Inflation Surge. Inflation started to climb when the world opened up, and the Fed started raising rates to calm things down. Mortgage rates shot up, too.
  • 2024: Trying to Find Balance. Rates bouncing around, usually between 6% and 7% reflecting the back and forth between inflation and economic expansion.
  • 2025: High But Steady. We're kind of stuck in the high-6% range without any dramatic drops.

This rollercoaster shows us it is not child's play, and there is no definite answer. This is why predictions should be seen as educated guesses, not guarantees.

Expert Expectations: What the Forecasters Are Saying About August 2025

Alright, let’s dive into what the people who study this stuff for a living are saying. I've scoured reports from the big names – NAR, Realtor.com, Fannie Mae, MBA, and Freddie Mac – to give you the most comprehensive outlook.

Here’s a quick rundown:

  • National Association of Realtors (NAR): Their chief economist, Lawrence Yun, thinks rates will average around 6.4% in the second half of 2025. He thinks inflation will calm down, and because of that, house sales should rise.
  • Realtor.com: They think we'll be at 6.4% by the end of 2025. August 2025 numbers will probably be around 6.5%-6.7%, so not a huge change.
  • Fannie Mae: They're predicting rates will end 2025 at 6.4% and then drop a bit more in 2026. For Q3 2026, it looks like they're seeing rates around 6%.
  • Mortgage Bankers Association (MBA): This group is playing it a bit safe. They think rates will stay close to 6.8% and then drop down to 6.7% by the end of the year.
  • Freddie Mac: They think rates are going to be up for a while, but slightly below what they were the prior year.
  • Morgan Stanley: Their economists believe that if the U.S. Treasury yields were to decrease, then this would also affect the interest rates.

To help you picture it all, take a look at this summary:

Source Q3 2025 (Aug) Forecast Year-End 2025 Forecast 2026 Forecast
NAR ~6.4% 6.4% 6.1%
Realtor.com ~6.5%-6.7% 6.4% –
Fannie Mae 6.5% 6.4% 6.0%
MBA 6.8% 6.7% 6.3%
Freddie Mac ~6.5%-6.7% ~6.5% –
Morgan Stanley ~6.5%-6.8% – Lower

The Bottom Line: Most experts seem to agree that mortgage rates in August 2025 will likely be in the 6.5% to 6.6% range. Don't expect any huge drops anytime soon. It looks like the bigger changes will happen later, maybe in 2026 or 2027.

What's Driving Rates? The Economic Factors at Play

Okay, so we know what the experts think, but why do they think that? Let's look at the main things that push mortgage rates up or down.

  1. The Federal Reserve (The Fed): The Fed controls the federal funds rate, which affects everything else, including mortgage rates. They've put the brakes on rate hikes due to inflation. It looks like if things cool down, they will lower rates.
  2. Inflation, Inflation, Inflation: The Fed really wants to get inflation down to 2%. If inflation drops faster than people expect, rates could slide down a bit. But, if something happens to push inflation up again (and there always could be), rates might stay higher.
  3. Treasury Yields: Mortgage rates like to follow the 10-year Treasury note yield.
  4. Economic Growth: A strong economy can mean higher rates.
  5. The Housing Market Itself: Are there a lot of houses for sale, or are people holding on to theirs? Are there a lot of buyers, or are people waiting? Low inventory has been pushing prices up, which can indirectly affect rates.

August 2025: Rate Scenarios and What They Mean

So, what could cause rates actually to go down in August 2025? Let's look at a few possibilities:

  • The Optimistic View (Rates Drop to Around 6.4%-6.5%) This happens if inflation eases faster than expected, encouraging the Fed to cut rates. Treasury yields would also need to come down as well.
    • What it Means: It would be a little easier to buy a home. For example, on a \$1 million house, if rates dropped from 6.74% to 6.4%, your monthly payment would decrease by a couple of hundred dollars.
    • How Likely? Possible, but inflation is still pretty sticky.
  • The Status Quo (Rates Stay Around 6.5%-6.7%) This is what most experts expect. Inflation hangs around and the Fed does nothing.
    • What it Means: Things would keep moving how they're probably moving now. Not cheap, but not getting worse either.
    • How Likely? Very likely, considering how things are playing out.
  • The Worrisome View (Rates Go Above 7%) This might happen if something causes inflation to jump up again. If that happened, the Fed might even have to raise rates again.
    • What it Means: Owning a home would get even harder, and sales would likely drop.
    • How Likely? Not likely, but always on the cards.

What This Means for You: Whether You're Buying or Already Own

  • For Homebuyers: It might not be worth waiting for a massive rate drop. While trying to predict the market can be enticing, sometimes its best to jump in.
  • For Homeowners: Should you refinance? Look at your current situation. If rates slide down a bit, and you can reduce your rate by 0.5% to 1%, it could be worth it.

Here's how monthly mortgage payments change with different interest rates:

The Big Picture: What the Housing Market Will Look Like in August 2025

Here's what the overall market might look like then:

  • More Sales: Overall, it seems like sales will climb, likely a slow pace, but still moving in the right direction.
  • Prices Calming Down: Don't expect another big spike in prices. It seems prices are beginning to normalize.
  • More Choices: It may become easier to find inventory as developers get rid of “rate lock.”
  • Sticking Points: Buying a home may still be unaffordable to most.

The Final Word: Patience and Planning Are Key

So, will mortgage rates drop in August 2025? The short answer is probably not by much. Expect rates to stay in the mid-6% range. Major changes may take even longer. Be patient, plan carefully, and don't try to predict impossible outcomes. Keep an eye on the news. Consult with a mortgage professional.

Invest Smarter in a High-Rate Environment

With mortgage rates remaining elevated this year, it's more important than ever to focus on cash-flowing investment properties in strong rental markets.

Norada helps investors like you identify turnkey real estate deals that deliver predictable returns—even when borrowing costs are high.

HOT NEW LISTINGS JUST ADDED!

Connect with a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now 

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

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

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

Key Takeaways:

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

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

Understanding Today’s Mortgage Rates on August 19, 2025

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

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

Current Mortgage Rate Summary Table (August 19, 2025)

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

Source: Zillow Mortgage Rates Data, August 19, 2025

Refinance Rates Today – August 19, 2025

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

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

Source: Zillow Refinance Rates Data, August 19, 2025

Economic Factors Affecting Mortgage and Refinance Rates

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

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

The Federal Reserve’s Role and Forecast for Mortgage Rates

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

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

Looking ahead:

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

How Do Today’s Rates Affect Borrowers?

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

Example Calculation: Monthly Mortgage Payment at Today’s Rates

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

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

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

Forecast Summary: What Experts Say

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

Broader Context: Why Rates Are Staying Elevated Longer Than Expected

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

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

Capitalize Amid Rising Mortgage Rates

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

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

HOT NEW LISTINGS JUST ADDED!

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

(800) 611‑3060

Get Started Now

Federal Reserve Interest Rate Predictions for the Next 2 Years

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Are you wondering where interest rates are heading? You're not alone! The Federal Reserve's (the Fed's) interest rate decisions affect everything from your mortgage payments to the growth of your investments. So, what's the scoop for the next two years? Expert predictions suggest a gradual decrease in interest rates.

As of August 2025, the federal funds rate sits at 4.25%-4.50%. Experts at the Federal Reserve and major financial institutions anticipate rates moving downward, although the pace and extent of these cuts remain uncertain, driven by factors like inflation, economic growth, and global events. Let's dive deep into what's influencing these predictions and what they mean for you.

Federal Reserve Interest Rate Predictions for the Next 2 Years

Before we get into the nitty-gritty, let's remember why paying attention to interest rates is so important. Think of them as the price of borrowing money.

  • For You: They affect how much you pay for mortgages, car loans, credit cards, and how much you earn on your savings. Lower rates mean cheaper loans but smaller returns on your savings.
  • For Businesses: They influence how much it costs companies to borrow money to invest and expand.
  • For the Economy: They help control inflation (rising prices) and support economic growth.

Basically, they are a big deal for all.

August 2025: Where Interest Rates Stand Right Now

As I write this in August 2025, the Federal Reserve (the Fed, for short) has kept the federal funds rate steady at a range of 4.25% to 4.50% in its July meeting. The Fed kept the rate unchanged for the fifth time in 2025. This federal funds rate is the benchmark interest rate for the US economy. It's what banks charge each other for overnight lending. It affects things like mortgages, credit cards, and savings accounts. The Fed put a hold on hiking interest rates after raising it many times in the recent past to try to curb inflation.

The Fed’s trying to balance controlling inflation, while making sure the economy keeps growing. It's a tough balancing act! The Fed's aiming for 2% inflation over the long term, and it's watching the data like a hawk before making any more moves.

Decoding the Fed's Crystal Ball: The SEP Projections

To get a sense of where the central bankers think rates are headed, you look at the Fed's Summary of Economic Projections (SEP). This report, updated every few months, gives us clues on what the Fed thinks will happen with interest rates, inflation, the economy, and jobs. I like to think of it as the Fed's way of saying, “Here's what we think will happen if we do what we think we should do.” It’s not a guarantee, but it's the best insight we've got.

Interest Rate Projections (according to the Summary of Economic Projections):

Here’s what the Fed's Summary of Economic Projections says it expects:

Year Median Projection Central Tendency Range Implication
2025 3.9% 3.9%–4.4% 3.6%–4.4% Two 0.25% cuts from current levels (4.25%–4.50%)
2026 3.4% 3.1%–3.9% 2.9%–4.1% One additional 0.25% cut
2027 3.1% 2.9%–3.6% 2.6%–3.9% Another 0.25% cut

In plain English, the Fed thinks it will be able to cut rates slowly over the next few years as inflation cools down and the economy stays steady.

Inflation Forecasts:

Since controlling inflation is job number one for the Fed, let's look at what they think will happen with prices. The Fed focuses on something called PCE inflation, which is a way of measuring how much prices are changing.

PCE Inflation:

Year Median Central Tendency Range
2025 2.7% 2.6%–2.9% 2.5%–3.4%
2026 2.2% 2.1%–2.3% 2.0%–3.1%
2027 2.0% 2.0%–2.1% 1.9%–2.8%

Core PCE Inflation:

Year Median Central Tendency Range
2025 2.8% 2.7%–3.0% 2.5%–3.5%
2026 2.2% 2.1%–2.4% 2.1%–3.2%
2027 2.0% 2.0%–2.1% 2.0%–2.9%

These forecasts paint a picture of inflation gradually falling back to the Fed's 2% target by 2027. It is predicted they will begin cutting rates as inflationary pressures ease

Economic Growth and Unemployment:

The Fed is looking at these factors:

Real GDP Growth:

Year Median Central Tendency Range
2025 1.7% 1.5%–1.9% 1.0%–2.4%
2026 1.8% 1.6%–1.9% 0.6%–2.5%
2027 1.8% 1.6%–2.0% 0.6%–2.5%

Unemployment Rate:

Year Median Central Tendency Range
2025 4.4% 4.3%–4.4% 4.1%–4.6%
2026 4.3% 4.2%–4.5% 4.1%–4.7%
2027 4.3% 4.1%–4.4% 3.9%–4.7%

It looks pretty stable. The Fed sees the economy growing a bit each year, and they think the job market will stay pretty tight.

What the Big Banks Are Saying

Graph Showing Interest Rate Predictions for the Next 2 Years

The Fed projections are only one piece of the puzzle. It’s always good to check out what other big players in the financial world are thinking. Here's a snapshot of interest rate predictions from some major institutions:

Institution 2025 Prediction 2026 Prediction 2027 Prediction
Federal Reserve 3.9% 3.4% 3.1%
BlackRock ~4% – –
Goldman Sachs 3.5%–3.75% – –
Morningstar 3.5%–3.75% – 2.25%–2.5%
Fannie Mae (30-yr) 6.3%–6.8% (mortgage) – –
Mortgage Bankers Association 6.8% (early) (mortgage) 6.4% –

A few things stand out to me here:

  • The Consensus: Most experts agree that interest rates will come down over the next two years, but they have a difference on how fast and how far.
  • The Cautious View: BlackRock seems a bit more reserved. They mention things like possible trade wars and other global issues, which could make the Fed think twice about slashing rates too quickly.
  • The Optimists: Morningstar is a bit more bullish, thinking rates could fall more dramatically if inflation cools off faster than most people expect.

Mortgage Rate Predictions:

If you're keeping an eye on mortgage rates:

  • Fannie Mae sees the 30-year fixed rate starting at 6.8% in early 2025 and then dropping to 6.3% later in the year.
  • The Mortgage Bankers Association predicts a drop from 6.8% to 6.4% throughout 2026.

What Could Throw a Wrench in the Works? The Global and Policy Wildcards

Making interest rate predictions is more than just crunching numbers. You need to think about the bigger picture like global events and government policies. Here are a few things that could shake things up:

  • Global Economic Conditions: What's happening in Europe, China, and other parts of the world matters too. If other countries are struggling, it could pull down the U.S. economy.
  • Trade and Tariffs: If the government starts slapping tariffs on goods from other countries, prices could go up!
  • Fiscal Policy: Tax cuts or big government spending could fire up the economy. If the economy grows too quickly, inflation could come roaring back.
  • Geopolitical Events: Wars, political instability, or unexpected crises can send shock waves through the economy, making it harder for the Fed to predict what's going to happen.

What It All Means for You: Consumers and Investors

So, how do these interest rate predictions impact your wallet?

For Consumers:

  • Borrowing Costs: Lower rates mean you'll pay less for mortgages, car loans, and anything else you borrow money for. This could make it easier to buy a home or a new car.
  • Savings Returns: The downside? You'll probably earn less on your savings accounts and CDs.

For Investors:

  • Bonds: When rates fall, bond prices tend to rise. So, if you already own bonds, you could see some gains. But remember, new bonds will pay lower interest rates.
  • Stocks: Lower rates can be good for stocks because they make it cheaper for companies to borrow money and grow. But if the Fed is cutting rates because the economy is faltering, that could temper the optimism.
  • Real Estate: Lower mortgage rates could fire up the housing market, potentially pushing home prices up.

Here’s a quick cheat sheet:

Financial Decision Impact of Lower Rates (2025-2027)
Buying a Home Cheaper mortgages, increased affordability
Savings Accounts Lower returns, reduced interest earnings
Stock Investments Potential gains, but risks remain
Bond Investments Higher prices for existing bonds, lower new yields

The Bottom Line and My Two Cents

The interest rate predictions for 2025-2027 point to a gradual easing, but the road ahead is anything but smooth. The Fed, along with financial institutions, anticipates rates declining from the current 4.25%–4.50% range to around 3.1% by 2027. I believe this path is reasonable because inflation is very hot now. But the Fed might cut more or less.

As I watch this situation of rate cuts unfold, there is a risk of some external factors blowing it all off course.

So, what should you do? Stay informed, be realistic, and remember that nobody has a crystal ball.

Recommended Read:

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

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

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

Key Takeaways

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

Current Mortgage Rates Overview for August 18, 2025

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

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

Source: Zillow, August 18, 2025

Refinance Rates Today – August 18, 2025

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

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

Source: Zillow, August 18, 2025

What’s Driving Mortgage Rates Right Now?

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

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

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

Expert Forecasts on Mortgage Rates Under Current Circumstances

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

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

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

How The Federal Reserve's Monetary Policy Affects Mortgage Rates

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

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

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

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

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

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

Calculation:

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

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

Why Mortgage Rates Remain Above 6% Despite Expectations

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

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

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

Detailed Breakdown of ARM vs Fixed Rates

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

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

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

The Role of Government Loan Programs

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

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

Personal Perspective: What This Means for Buyers and Refinancers

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

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

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

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

Capitalize Amid Rising Mortgage Rates

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

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

HOT NEW LISTINGS JUST ADDED!

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

(800) 611‑3060

Get Started Now

Today’s Mortgage Rates – August 17, 2025: Rates Rise Marginally Across the Spectrum

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As of August 17, 2025, mortgage rates have seen a slight increase for certain loan types, with the 30-year fixed mortgage rate climbing from 6.68% to 6.73%. Meanwhile, refinance rates have generally decreased slightly, with the 30-year fixed refinance rate falling from 6.95% to 6.91%. This mixed movement reflects ongoing economic uncertainty and anticipation around Federal Reserve policy moves later this year.

Today's Mortgage Rates – August 17, 2025: Rates Rise Marginally Across the Spectrum

Key Takeaways

  • 30-year fixed mortgage rates increased to 6.73%, up 5 basis points from last week.
  • 15-year fixed mortgage rates slightly decreased to 5.77%.
  • 5-year ARM mortgage rates rose significantly to 7.38%.
  • 30-year fixed refinance rates modestly dropped to 6.91%, down 4 basis points from last week.
  • Federal Reserve signals potential rate cuts in September and December 2025, which could lower mortgage rates later this year.
  • Experts predict mortgage rates to stay above 6% through 2025 and ease toward 6.1-6.4% in 2026.
  • Job growth weakness and inflation data are influencing mortgage rate trends.

Current Mortgage Rates Overview – August 17, 2025

Mortgage rates today show a nuanced picture:

Loan Type Rate (8/17/2025) 1 Week Change APR 1 Week APR Change
30-Year Fixed 6.73% +0.05% 7.11% -0.02%
20-Year Fixed 6.37% -0.10% 6.88% 0.00%
15-Year Fixed 5.76% +0.01% 5.96% -0.09%
10-Year Fixed 5.48% 0.00% 5.84% 0.00%
7-Year ARM 7.30% +0.21% 8.06% +0.47%
5-Year ARM 7.38% +0.15% 7.78% 0.00%

Note: ARM = Adjustable Rate Mortgage

Government-backed loans have seen small decreases this week:

Loan Type Rate (8/17/2025) 1 Week Change APR 1 Week APR Change
30-Year Fixed FHA 6.27% -0.10% 7.28% -0.11%
30-Year Fixed VA 5.95% -0.21% 6.01% -0.33%
15-Year Fixed FHA 5.40% -0.11% 6.36% -0.11%
15-Year Fixed VA 5.55% -0.21% 5.66% -0.43%

(Source: Zillow)

Refinance Rates Today – August 17, 2025

Refinancing offers a slightly more favorable environment with small improvements:

Refinance Loan Type Rate (8/17/2025) 1 Week Change
30-Year Fixed 6.91% -0.04%
15-Year Fixed 5.76% 0.00%
5-Year ARM 7.60% -0.12%

The refinance rates' slight decline suggests homeowners with higher existing rates might find better opportunities if the Fed moves to cut interest rates later this year.

What’s Behind These Movements in Mortgage Rates?

Mortgage rates for August 2025 are largely influenced by a few key economic factors:

  • Federal Reserve Monetary Policy: The Fed has held the federal funds rate steady through five meetings in 2025 but is widely expected to cut rates later this year, possibly in September or December. This anticipation is keeping rates somewhat steady but with volatility.
  • Economic Data: Weak job growth in recent months and inflation in July that remains “sticky” but below expectations have affected traders' and lenders' outlook.
  • Inflation & GDP: Inflation persists around 2.7% core PCE, and GDP growth slowed to about 1.2% annualized. This slow growth contributes to uncertainty in mortgage markets.
  • Market Sentiment: Bond market activity, especially in the 10-year Treasury yield (around 4.34%), plays a direct role in mortgage rate fluctuations.

Mortgage rates have hovered mostly between 6.6% and 6.8% for much of 2025, showing a narrow but persistent high range. Most experts agree that while some declines may come by year-end or in 2026, rates are expected to stay above 6% for the foreseeable future.

Forecast: What Experts Are Saying on Mortgage Rates

Mortgage rate outlooks from several reputable sources provide varied but cautious optimism:

  • National Association of REALTORS®: Predict an average mortgage rate to hover around 6.4% in the latter half of 2025, dipping slightly to about 6.1% in 2026. They stress mortgage rates strongly affect buyer affordability and demand.
  • Fannie Mae: Their latest outlook sees mortgage rates ending 2025 near 6.5%, easing to 6.1% in 2026, with economic growth expected to pick up slightly next year.
  • Mortgage Bankers Association: Projects 30-year rates to stay near 6.8% through September 2025, then to soften gradually toward mid-6% range by 2026.
  • Realtor.com: Foresees mortgage rates easing slowly, matching the prior year’s average overall but dipping modestly by year-end.

These forecasts reflect the delicate balance of economic forces, Fed policy decisions, and inflation pressures shaping mortgage markets.

Example Calculation: Impact of Rate Changes on Monthly Payments

To understand the impact of the current rate fluctuation, consider a $300,000 loan amount with a 30-year fixed mortgage.

Mortgage Rate Monthly Principal & Interest Payment (Approx.)
6.68% (Last Week) $1,940
6.73% (Today) $1,947

A 5 basis points increase raises the monthly payment by about $7, which may seem small but adds up over 30 years to an extra $2,520.

In contrast, a refinance rate drop on a similar loan affects total payments and savings:

Refinance Rate Monthly Payment Change From Prior Week
6.95% $1,996 Baseline
6.91% $1,990 -$6

While changes seem minor week-to-week, over large loan balances, even small rate shifts can have significant financial implications long term.

The Federal Reserve’s Role in 2024-2025 Mortgage Rate Trends

The Federal Reserve’s monetary policy decisions are the biggest influence on mortgage rate trends. Here’s what happened recently and what’s ahead:

  • During the pandemic, mortgage rates were extremely low due to Fed bond purchases supporting the economy.
  • The Fed then raised rates aggressively from 2022 through mid-2023 to fight inflation, causing mortgage rates to spike to near 7%.
  • In late 2024, the Fed reversed course, cutting rates three times, bringing federal funds rate down to 4.25%-4.5%.
  • In 2025, the Fed paused rate changes but faces pressure from some leaders to cut rates to support slowing growth.
  • Markets currently place about a 47% chance of a rate cut at the Fed’s September 16-17 meeting.
  • If cuts do occur, mortgage rates may drop closer to 6%, potentially sparking more borrowing and refinancing activity by early 2026.

How Do These Rate Changes Affect Buyers and Refinancers?

Buyers facing today’s mortgage rates should recognize that:

  • Rates remain historically high compared to the pandemic era but hover in a relatively narrow, slightly elevated range.
  • Timing purchase decisions on expected rate drops may be risky because the market can move unexpectedly; affordability and personal financial circumstances should guide buying.
  • Government-backed loan rates generally offer slightly more favorable rates for qualified borrowers, which may help counterbalance rising conventional loan rates.

For homeowners considering refinancing:

  • Slight drops in refinance rates may offer an opportunity if your current mortgage rate exceeds 7%.
  • Federal Reserve moves in late 2025 could make refinancing a more cost-effective option soon.
  • ARM refinance rates remain higher, meaning fixed-rate refinancing might be preferable despite rate movements.

Summary Table: August 17, 2025 Mortgage vs. Refinance Rates

Loan Type Mortgage Rate Change from 1 Week Ago Refinance Rate Change from 1 Week Ago
30-Year Fixed 6.73% +0.05% 6.91% -0.04%
15-Year Fixed 5.77% -0.01% 5.76% 0.00%
5-Year ARM 7.38% +0.15% 7.60% -0.12%
FHA 30-Year Fixed 6.27% -0.10% N/A N/A
VA 30-Year Fixed 5.95% -0.21% N/A N/A

Capitalize Amid Rising Mortgage Rates

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

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

HOT NEW LISTINGS JUST ADDED!

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

(800) 611‑3060

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Mortgage Rates Today: 5-Year ARM Jumps by 3 Basis Points – August 16, 2025

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As of today, August 16, 2025, the national average 5-year ARM (Adjustable-Rate Mortgage) rate has risen by 3 basis points to 7.26%. Let's dive into what this means for you, whether you're a potential homebuyer, a seasoned homeowner looking to refinance, or just curious about the ever-shifting world of mortgage finance.

Mortgage Rates Today: 5-Year ARM Jumps by 3 Basis Points – August 16, 2025

Understanding Today's Mortgage Rate Snapshot

Mortgage rates are anything but static. They dance to the tune of the economy, reacting to everything from inflation reports to Federal Reserve decisions. Here's a quick overview of where things stand today, courtesy of Zillow data:

  • 30-Year Fixed Rate: 6.67% (down 1 basis point from last week)
  • 15-Year Fixed Rate: 5.79% (up 4 basis points from last week)
  • 5-Year ARM: 7.26% (up 3 basis points from last week)

To give you a complete picture, here’s a table summarizing the rates:

Program Rate 1W Change APR 1W Change
30-Year Fixed Rate 6.67% down 0.01% 7.14% up 0.01%
20-Year Fixed Rate 6.37% down 0.10% 6.88% 0.00%
15-Year Fixed Rate 5.79% up 0.04% 6.09% up 0.04%
10-Year Fixed Rate 5.48% 0.00% 5.84% 0.00%
7-Year ARM 7.30% up 0.21% 8.06% up 0.47%
5-Year ARM 7.26% up 0.03% 7.83% up 0.05%
3-Year ARM — 0.00% — 0.00%

Why the Focus on the 5-Year ARM?

Now, you might be wondering why we're zeroing in on the 5-year ARM. While the 30-year fixed rate is the go-to mortgage for many, ARMs offer a different kind of opportunity – and risk. As the name suggests, during the initial fixed-rate period (in this case, five years), your interest rate stays the same. After that, it adjusts periodically based on a benchmark index (like the SOFR plus a margin agreed upon at the inception of the agreement).

For example, if you plan to move or upgrade within five years, or expect interest rates to fall in the near future, an ARM might seem enticing. You could potentially snag a lower initial rate than a fixed-rate mortgage. But there is always an element of risk as the rates may go up after that fixed period term gets over.

Diving Deeper: The Federal Reserve's Role

Mortgage rates don't just pop up out of nowhere. They're heavily influenced by the Federal Reserve (the Fed), and understanding the Fed's moves is crucial to predicting where rates are headed, as well as to understand today's mortgage rates.

  • Pandemic Era: In 2021-2023 – The Fed kept rates super low to help the economy recover from the pandemic.
  • Struggling with Inflation: The Fed then aggressively raised rates to combat inflation, indirectly pushing mortgage rates upward.
  • Recent Actions: After raising the rates continuously, the Fed cut rates three times in late 2024, reducing the federal funds rate by 1 percentage point to 4.25%-4.5%.
  • 2025 Status: The Fed has now held rates steady consecutively for five meetings in 2025. There are varying opinions amongst them with some advocating for immediate cuts to address slowing growth.
  • Impact on Mortgage Rates: 30-year fixed rates have hovered near 6.8% through mid-2025, with modest declines expected later this year if cuts materialize.

The Big Picture: What Does It All Mean?

So, how should you interpret all of this information?

  • For Homebuyers: If you're on the fence about buying, keep a close eye on the Fed's upcoming meetings, especially September 16-17 because it will give an updated economic projections, as well as the December meeting of this year. Any rate cuts could provide some relief. If you believe that interest rates will be stable in 5 years, ARM can be a good option.
  • For Refinancers: If your current mortgage rate is above 7%, keep a close eye on the Fed's decision and actions. There are potential opportunities coming along the way.

I believe that nobody can accurately predict the future, it's always a smart plan to be prepared and informed. By staying informed and consulting with a financial advisor, you can make smart choices.

Capitalize on ARM Rates Before They Rise Even Higher

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

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

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Connect with an investment counselor today (No Obligation):

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Will the Housing Market Bounce Back as Mortgage Rates Drop in 2025?

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A modest drop in mortgage rates is likely to provide some much-needed relief and a potential boost to the housing market in 2025 but it won't be a magic bullet. The average 30-year U.S. mortgage rate has dipped to its lowest point in nearly ten months, and while that's good news, several factors still need to align for a significant market turnaround.

Okay, you might be thinking, finally some good news! But, as someone who's been following the housing market closely, I can tell you it's not quite time to pop the champagne just yet. Here's a deeper look at what's going on and what it could mean for you whether you're looking to buy, sell, or just keep an eye on the overall economic picture.

Will the Housing Market Bounce Back as Mortgage Rates Drop in 2025?

What's Happening with Mortgage Rates?

Let's get down to the numbers. According to Freddie Mac, the average rate on a 30-year mortgage has fallen to 6.58%, down from 6.63% the previous week. That's the lowest its been since October of last year.

Here's a quick comparison to give you some context:

Mortgage Type Current Rate (Aug 2025) Previous Week Year Ago
30-Year Fixed 6.58% 6.63% 6.49%
15-Year Fixed 5.71% 5.75% 5.66%

While these small dips might not seem like a huge deal, they can make a difference in your monthly payments and, ultimately, what you can afford.

Why Did Mortgage Rates Drop?

Mortgage rates don't just move randomly. They are heavily influenced by factors like:

  • The Federal Reserve's Interest Rate Decisions: The Fed's actions play a huge role. If they cut rates, mortgage rates tend to follow.
  • Bond Market Expectations: Investors' beliefs about the economy and inflation also push rates up or down.
  • Economic Data: Weaker economic data, like the July job market figures, have fueled speculation that the Fed might cut rates.

The 10-year Treasury yield is a key indicator. Lenders often use it as a guide for pricing home loans. Recently, this yield has been fluctuating, influenced by inflation reports and expectations of Fed policy.

Will This Really Help the Housing Market?

This is the big question, right? The housing market has been in a slump since 2022 because of high mortgage rates. Home sales hit their lowest level in nearly 30 years last year. So, will this rate drop change things?

Here’s where I think things get interesting. Joel Berner, a senior economist at Realtor.com, points out that this decline may be enough, but it may take longer to lure more buyers back to the market.

The Good News:

  • Increased Purchasing Power: Lower rates mean buyers can afford more house for the same monthly payment.
  • Refinancing Opportunities: Homeowners who have been waiting for lower rates may now be able to refinance and save money. In fact, mortgage applications jumped nearly 11% last week, driven by refinance activity.

The Challenges:

  • Affordability Still a Hurdle: Even with lower rates, home prices are still very high. The median sales price of a previously occupied U.S. home hit a record $435,300 in June.
  • Inflation Concerns: Inflation remains a wildcard. A recent report showed wholesale prices jumping more than expected. If inflation stays high, it could push bond yields and mortgage rates back up.
  • The Fed's Cautious Approach: The Fed has been hesitant to cut rates too quickly. It's going to take more solid news on the inflation front to convince them to act.

What Does This Mean for You?

  • If You're a Buyer: Don't get too excited just yet, but keep a close eye on rates. Small declines can make a difference. Also be realistic with your budget.
  • If You're a Seller: Lower rates could bring more buyers into the market, but don't expect a bidding war right away. Pricing your home competitively is still key.
  • If You're a Homeowner: Explore refinancing options. Even a small rate reduction can save you money over the life of your loan.

Where Do We Go From Here? My Take

I think we will see a slow and steady improvement in the housing market. I believe that the Fed will eventually start cutting rates, but they are going to be cautious and data-dependent.

Several potential scenarios stand out to me:

  • Scenario 1: Gradual Improvement: I think mortgage rates will continue to fluctuate but remain above 6% for most of the year.
  • Scenario 2: Inflation Surprise: If inflation comes down faster than expected the Fed might cut rates more aggressively, giving the housing market a bigger boost. But again, be cautiously optimistic.
  • Scenario 3: Economic Slowdown: A significant economic downturn could push rates even lower, as investors flock to the safety of bonds.

The Bottom Line: The drop in mortgage rates is a positive sign, but it's not a guaranteed fix for the housing market's challenges. Affordability, inflation, and the Fed's policies will all play a role. I think being informed, realistic, and ready to act when the timing is right is very crucial.

Capitalize Amid Rising Mortgage Rates

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

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

HOT NEW LISTINGS JUST ADDED!

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

(800) 611‑3060

Get Started Now

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