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U.S. States With Lowest and Best Mortgage Rates Today – June 26, 2025

June 26, 2025 by Marco Santarelli

U.S. States With Lowest Mortgage Rates Today – July 1, 2025

Looking for the best deal on a mortgage? Today, June 26, 2025, the states boasting the lowest average 30-year mortgage rates for new purchases are New York, Colorado, Connecticut, California, Massachusetts, New Jersey, Florida, Idaho, Utah, and Virginia, with rates hovering between 6.69% and 6.80%. On the other hand, Alaska, Rhode Island, West Virginia, Iowa, New Mexico, North Dakota, South Dakota, and Maine, have the highest, ranging between 6.90% and 7.05%. But bear in mind as with everything related to money, Your Mileage May Vary!

U.S. States With Lowest Mortgage Rates Today – June 26, 2025

Okay, now that we've got the headline figures out of the way, let’s dive deeper into why these differences exist, what it means for you, and how you can snag the best possible rate, no matter where you live.

Why Do Mortgage Rates Vary From State to State?

It’s tempting to think mortgage rates should be uniform across the U.S., like the price of a Big Mac (though, even that varies!). However, several factors can influence mortgage rates from one state to another. These include:

  • Lender Presence and Competition: Not all lenders operate in every state. A state with more competition between lenders might see slightly lower rates as they jostle for your business.
  • State-Specific Regulations: Each state has its own set of regulations governing the mortgage industry, which can impact lender costs and, ultimately, the rates they offer.
  • Credit Score Averages: States with higher average credit scores might see slightly lower rates overall since lenders perceive lower risk.
  • Average Loan Size: The average loan size within a state, coupled with loan limits, might influence rates. Larger loan amounts sometimes come with slightly different pricing structures.
  • Risk Management Variation: A lender's internal appetite for risk can result in rate differences. For example, some lenders are comfortable working with loans requiring private mortgage insurance (PMI), while others seek to avoid these.

Essentially, it's a mix of local economics and lender strategy that creates these state-by-state variations. However, it shouldn't affect the rate in any way.

States Showcasing the Lowest Mortgage Rates

Let's take a closer look at the states currently enjoying some of the most competitive mortgage rates, according to Investopedia's analysis and Zillow's data:

  • New York: New York is a financial hub along with having a diverse blend of urban areas and suburban communities.
  • Colorado: Known for its outdoor lifestyle and booming tech sector, Colorado's attractive real estate market has been balanced by a healthy mortgage rate.
  • Connecticut: The charm of Connecticut lies in its good schools and easy access to New York City, and these have drawn people to move and keep the local real estate market stable.
  • California: Despite its high cost of living, California's robust economy and strong demand for housing ensures a steady flow of mortgage activity.
  • Massachusetts: Top-notch universities and access to healthcare are a selling point of Massachusetts, which keeps its housing market active.
  • New Jersey: Located near NYC and with a lot of jobs, New Jersey has a high demand for real estate.
  • Florida: The attractive climate and low tax rates of Florida are a big draw, that help sustain the constant demand for housing.
  • Idaho: The appeal of smaller town of Idaho and outdoor recreation, the increase in population has led to competition for homes.
  • Utah: Utah's tech employment opportunities and a rapidly increasing population are drawing people into the mix.
  • Virginia: Virginia gives access to government jobs and military installations, and an overall good quality of life.

These states often have a combination of strong economies, competitive lending environments, and stable real estate markets, which contribute to their lower average mortgage rates.

States with the Highest Mortgage Rates

Now, let’s turn our attention to the states with the higher end of the spectrum:

  • Alaska: Remote and with a unique economy based on natural resources, Alaska has factors that lead to higher lending costs.
  • Rhode Island: Small geographic location, Rhode Island's economy could be limiting competition, which means that there are higher rates.
  • West Virginia: West Virginia faces some economic challenges, and a more sparse housing market could contribute to higher rates.
  • Iowa: Iowa's rural setting and agricultural background might lead to less competition among lenders.
  • New Mexico: Economic factors in New Mexico may be restricting lending competition and influencing higher rates.
  • North Dakota: Limited competition and a sparse real estate market in North Dakota could lead to higher mortgage rates.
  • South Dakota: The rural setting, very similar to North Dakota can increase the mortgage rate.
  • Maine: Maine's smaller population and a more exclusive real estate market can affect mortgage rates.

National Mortgage Rate Trends – A Broader Perspective

While state-by-state variations are interesting, it’s crucial to understand the broader national trends influencing mortgage rates. According to recent data, the average 30-year fixed mortgage rate for new purchases is around 6.83%. This marks a decrease of 8 basis points over the past three days, reaching the lowest level since April 4th.

However, it’s worth noting that rates have been higher this year. In mid-May, the average surged to a one-year high of 7.15%. Throughout 2025, we’ve seen fluctuations, with rates dipping to as low as 6.50% in March and even lower, reaching a two-year low of 5.89% in September of last year.

Here’s a snapshot of national averages for different loan types from Zillow:

Loan Type New Purchase Rate
30-Year Fixed 6.83%
FHA 30-Year Fixed 7.55%
15-Year Fixed 5.85%
Jumbo 30-Year Fixed 6.82%
5/6 ARM 7.27%

What's Driving These Fluctuations?

Mortgage rates don’t just magically appear; they’re influenced by a complex web of factors, including:

  • The Bond Market: Monitor trends in the bond market, especially 10-year Treasury yields.
  • The Federal Reserve (The Fed): The Fed's monetary policy decisions play a large role, especially anything related to bond purchasing.
  • Lender Competition: The level of competition between mortgage lenders and different loan types.
  • Inflation: Concerns around inflation drive rates up, while confidence in controlling inflation tends to bring them down.

Read More:

States With the Lowest Mortgage Rates on June 25, 2025

Are Mortgage Rates Expected to Go Down Soon: A Realistic Outlook

The Fed's Role and What To Expect

The Federal Reserve's actions have a huge impact on mortgage rates. In 2022 and 2023, the Fed aggressively raised the federal funds rate to combat high inflation, causing a dramatic increase in mortgage rates.

The Fed has maintained the federal funds rate at its peak starting in July 2023. Then they announced a first rate cut of 0.50 percentage points in September, with smaller cuts in November and December. However, at their latest meeting, they opted to hold rates steady, suggesting we might not see further cuts for several months. With eight rate-setting meetings scheduled each year, there's a chance we could see several more rate-hold announcements throughout 2025.

How to Secure the Best Rate for You

Now, let’s get to the practical part: how can you get the best possible mortgage rate? Here's my top advice:

  1. Shop Around, Shop Around, Shop Around: I can't stress this enough! Get quotes from multiple lenders. Don’t just settle for the first rate you see. Compare rates from different banks, credit unions, and online lenders.
  2. Boost Your Credit Score: A higher credit score translates to lower risk in the eyes of lenders, and a lower risk translates to better rates. Check your credit report for errors and take steps to improve your score if needed.
  3. Save for a Larger Down Payment: A larger down payment means you'll borrow less money, which can lead to a lower interest rate. Plus, putting down at least 20% can help you avoid private mortgage insurance (PMI).
  4. Consider Different Loan Types: Explore different loan types like fixed-rate mortgages, adjustable-rate mortgages (ARMs), FHA loans, and VA loans to see which one best suits your financial situation.
  5. Be Aware of “Teaser Rates”: Be cautious of advertised rates that seem too good to be true. These “teaser rates” often require paying points upfront or are based on unrealistic scenarios (like an ultra-high credit score or a smaller-than-typical loan).
  6. Negotiate: Don't be afraid to negotiate with lenders. If you get a lower offer from one lender, see if another lender is willing to match or beat it!
  7. Understand Your All-In Costs: Don't just focus on the interest rate. Consider all costs, including closing costs, lender fees, and any points you might pay.

Buying a home is a huge, life-changing decision, and something I've gone through myself. Make sure to be fully informed and to take your time.

The Bottom Line

Mortgage rates are dynamic and influenced by a variety of factors, from state-level economic conditions to national monetary policy. While New York, Colorado, Connecticut, California, Massachusetts, New Jersey, Florida, Idaho, Utah, and Virginia shows the lowest rates today, remember that your individual rate will depend on your specific financial situation and creditworthiness. Do your due diligence, shop around, and don't be afraid to negotiate to secure the best possible mortgage rate for your dream home.

Invest in Real Estate in the Top U.S. Markets

Investing in turnkey real estate can help you secure consistent returns with fluctuating mortgage rates.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now

Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • 30-Year Mortgage Rate Forecast for the Next 5 Years
  • 15-Year Mortgage Rate Forecast for the Next 5 Years
  • Why Are Mortgage Rates Going Up in 2025: Will Rates Drop?
  • Why Are Mortgage Rates So High and Predictions for 2025
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Financing, Mortgage Tagged With: Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions, Mortgage Rates Today

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

June 25, 2025 by Marco Santarelli

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

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.

Read More:

States With the Lowest Mortgage Rates on June 25, 2025

Are Mortgage Rates Expected to Go Down Soon: A Realistic Outlook

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!

Invest in Real Estate in the Top U.S. Markets

Investing in turnkey real estate can help you secure consistent returns with fluctuating mortgage rates.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now

Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • 30-Year Mortgage Rate Forecast for the Next 5 Years
  • 15-Year Mortgage Rate Forecast for the Next 5 Years
  • Why Are Mortgage Rates Going Up in 2025: Will Rates Drop?
  • Why Are Mortgage Rates So High and Predictions for 2025
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Financing, Mortgage Tagged With: Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions, Mortgage Rates Today

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

June 24, 2025 by Marco Santarelli

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

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.

Read More:

States With the Lowest Mortgage Rates on June 18, 2025

Are Mortgage Rates Expected to Go Down Soon: A Realistic Outlook

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!

Invest in Real Estate in the Top U.S. Markets

Investing in turnkey real estate can help you secure consistent returns with fluctuating mortgage rates.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now

Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • 30-Year Mortgage Rate Forecast for the Next 5 Years
  • 15-Year Mortgage Rate Forecast for the Next 5 Years
  • Why Are Mortgage Rates Going Up in 2025: Will Rates Drop?
  • Why Are Mortgage Rates So High and Predictions for 2025
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Financing, Mortgage Tagged With: Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions, Mortgage Rates Today

Do Mortgage Rates Go Down During an Economic Recession?

June 22, 2025 by Marco Santarelli

Do Mortgage Rates Go Down During an Economic Recession?

Do mortgage rates go down during an economic recession? The short answer is, it's complicated, but often, yes, they do. While there's no guarantee, history shows that in recent decades, mortgage rates often decrease during and after a recession. This is largely due to the Federal Reserve's actions to stimulate the economy, but it's important to remember that every recession is different, and factors like inflation play a huge role. Let’s dive into why this happens, looking at past recessions and what it all means for you.

As someone who's followed the housing market and economy for a long time, I know how confusing it can be. Figuring out if now's a good time to buy a home is a big decision, and understanding how recessions affect mortgage rates is a key piece of that puzzle. I'm going to break down the historical data and the factors that drive these changes in a way that's easy to understand.

Let's find out whether mortgage rates typically drop during economic recessions by examining historical data from major U.S. recessions since 1970, drawing from sources like Freddie Mac’s Primary Mortgage Market Survey and other economic analyses.

Do Mortgage Rates Go Down During an Economic Recession?

Historical Analysis of Mortgage Rates During U.S. Recessions

To understand the relationship between mortgage rates and recessions, let’s examine the behavior of 30-year fixed mortgage rates during each major U.S. recession since 1970, based on data from Freddie Mac and other reputable sources.

Recession Period Average Mortgage Rate Range Trend During Recession Key Influences
1973-1975 (Nov 1973 – Mar 1975) 8-9% Stable or increasing High inflation, oil crisis
1980 (Jan 1980 – Jul 1980) 13-14% Increasing Stagflation, Federal Reserve rate hikes
1981-1982 (Jul 1981 – Nov 1982) 16-18% (peaked at 18.63% in Oct 1981) Peaked, then began to decline High inflation, Federal Reserve actions
1990-1991 (Jul 1990 – Mar 1991) ~10% to ~9% Decreasing Stabilizing inflation, economic recovery
2001 (Mar 2001 – Nov 2001) ~8% to ~6.5% Decreasing Federal Reserve rate cuts, dot-com bubble burst
2007-2009 Great Recession (Dec 2007 – Jun 2009) ~6.73% to ~5% Decreasing Federal Reserve quantitative easing, housing market crash
2020 COVID-19 (Feb 2020 – Apr 2020) ~3-4% to <3% Decreasing Federal Reserve emergency measures, low pre-recession rates

1973-1975 Recession

  • Period: November 1973 – March 1975
  • Mortgage Rates: Rates started in the mid-7% range in the early 1970s and rose to around 9.19% by 1974, continuing to climb to 11.2% by 1979 (Atlantic Bay).
  • Trend: Rates did not drop during this recession. The period was marked by high inflation due to the 1973 oil crisis, which drove up borrowing costs as lenders adjusted rates to keep pace with rising prices.
  • Key Influences: The Organization of the Petroleum Exporting Countries (OPEC) oil embargo led to hyperinflation, prompting the Federal Reserve to maintain or increase interest rates to combat rising prices.

1980 Recession

  • Period: January 1980 – July 1980
  • Mortgage Rates: Rates averaged around 13.74% in 1980, reflecting the high inflationary environment of the late 1970s.
  • Trend: Rates continued to rise during this short recession, part of a broader trend that saw rates peak in 1981. The Federal Reserve’s efforts to curb stagflation (high inflation and low growth) kept borrowing costs elevated.
  • Key Influences: Stagflation and the Federal Reserve’s aggressive rate hikes to control inflation were primary drivers, making borrowing expensive.

1981-1982 Recession

  • Period: July 1981 – November 1982
  • Mortgage Rates: Rates reached an all-time high of 18.63% in October 1981, the highest recorded by Freddie Mac (Debexpert). They began to decline slightly toward the end of the recession but remained in the double digits.
  • Trend: Rates peaked during the early part of the recession and started to decline as the Federal Reserve’s policies began to tame inflation. However, they remained high throughout the recession period.
  • Key Influences: The Federal Reserve, under Paul Volcker, raised interest rates to combat inflation, which had risen to 9.5% by 1981. This led to unprecedented borrowing costs, but the subsequent decline in inflation allowed rates to start falling by late 1982.

1990-1991 Recession

  • Period: July 1990 – March 1991
  • Mortgage Rates: Rates were around 10.13% at the start of 1990 and began to decrease, reaching around 9% during the recession and continuing to fall to 6.94% by 1998.
  • Trend: Rates showed a downward trend during this recession, reflecting stabilizing inflation and economic recovery efforts. The 1990s saw a general decline in rates as the economy benefited from low unemployment and solid growth.
  • Key Influences: The stabilization of inflation and the Federal Reserve’s less aggressive monetary policy compared to the 1980s contributed to the decline in rates.

2001 Recession

  • Period: March 2001 – November 2001
  • Mortgage Rates: Rates started at around 8% in early 2001 and dropped to approximately 6.5% by November 2001, according to Freddie Mac data (FRED).
  • Trend: This recession saw a clear decrease in mortgage rates, driven by Federal Reserve rate cuts in response to the dot-com bubble burst and economic slowdown.
  • Key Influences: The Federal Reserve lowered short-term interest rates to stimulate the economy, and the shift of investor focus to fixed-income investments like bonds further reduced mortgage rates.

2007-2009 Great Recession

  • Period: December 2007 – June 2009
  • Mortgage Rates: Rates were around 6.73% in late 2007 and fell to the low-to-mid-5% range by December 2008, reaching 5.4% by 2009.
  • Trend: Rates decreased significantly during this recession, starting even before the official recession period as markets anticipated economic trouble. The decline continued post-recession due to sustained Federal Reserve interventions.
  • Key Influences: The Federal Reserve implemented quantitative easing, buying mortgage bonds to drive down interest rates, and the housing market crash reduced loan demand, further lowering rates.

2020 COVID-19 Recession

  • Period: February 2020 – April 2020
  • Mortgage Rates: Rates were already low, averaging 3.72% in January 2020, and fell to 3.31% by April 2020, dropping to a record low of 2.65% in January 2021.
  • Trend: This brief recession saw mortgage rates decrease sharply, continuing a downward trend that led to historic lows in 2021.
  • Key Influences: The Federal Reserve’s emergency measures, including cutting the federal funds rate to near zero, and low pre-recession rates due to a stable economy, drove rates down.

Read More:

Mortgage Rate Predictions for This Week: Expect Volatility, Not Relief

Mortgage Rates Likely to Go Down in the Short Term Due to Tariffs

Why Do Mortgage Rates Behave This Way?

Several factors influence mortgage rate movements during recessions:

  • Federal Reserve Policy: The Federal Reserve plays a pivotal role by adjusting short-term interest rates. During recessions, the Fed often lowers the federal funds rate to encourage borrowing and spending, which indirectly affects long-term mortgage rates. This was evident in the 2001, 2007-2009, and 2020 recessions, where aggressive rate cuts and quantitative easing led to lower mortgage rates (Investopedia).
  • Inflation: High inflation, as seen in the 1970s and early 1980s, pushes mortgage rates upward as lenders demand higher returns to offset rising prices. Conversely, low inflation or deflationary pressures during recessions can lead to lower rates, as observed in the 1990s and 2000s.
  • Economic Demand: Recessions typically reduce demand for mortgages due to job losses and economic uncertainty. Lower demand can lead lenders to offer competitive rates to attract borrowers, contributing to rate declines.
  • Bond Market Dynamics: Mortgage rates are closely tied to the yield on 10-year Treasury bonds. During economic uncertainty, investors often seek safe-haven assets like bonds, increasing bond prices and lowering yields, which pulls mortgage rates down.

Do Mortgage Rates Always Drop During Recessions?

Historical data indicates that mortgage rates do not always drop during recessions. In the 1973-1975 and 1980 recessions, rates were either stable or increasing due to high inflation and economic instability. The 1981-1982 recession saw rates peak at historic highs before beginning to decline. However, in more recent recessions (1990-1991, 2001, 2007-2009, and 2020), rates consistently decreased, often starting before or during the recession and continuing afterward.

This shift reflects changes in Federal Reserve policy over time. Since the 1990s, the Fed has been more proactive in cutting interest rates and implementing measures like quantitative easing to combat recessions, directly impacting mortgage rates. Additionally, lower inflation in recent decades has reduced upward pressure on rates, unlike the high-inflation environment of the 1970s and early 1980s.

Implications for Homebuyers

For homebuyers, a recession can present opportunities if mortgage rates drop, as lower rates reduce borrowing costs and increase affordability. For example, during the 2007-2009 Great Recession, rates fell to the 5% range, making homeownership more accessible for some. Similarly, the record-low rates in 2020-2021 spurred a surge in homebuying and refinancing (LendingTree).

However, recessions also bring economic challenges, such as job losses and reduced consumer confidence, which can make homebuying riskier. Home prices may also decline during recessions due to lower demand, as noted in projections for a potential 2025 recession. Homebuyers should weigh these factors and consult financial advisors to assess their personal circumstances.

In Conclusion

So, to circle back to our original question: Do mortgage rates go down during an economic recession? While it's not a sure thing, historical evidence suggests that they often do, especially in more recent times. This is largely due to the Fed's response to economic downturns, but factors like inflation can also play a role.

Ultimately, the decision of whether or not to buy a home during a recession is a personal one. It depends on your financial situation, your risk tolerance, and your long-term goals. By understanding the factors that influence mortgage rates, you can make a more informed decision.

Work With Norada, Your Trusted Source for

Real Estate Investment in the U.S.

Investing in turnkey real estate can help you secure consistent returns with fluctuating mortgage rates.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

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Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • 30-Year Mortgage Rate Forecast for the Next 5 Years
  • 15-Year Mortgage Rate Forecast for the Next 5 Years
  • Why Are Mortgage Rates Going Up in 2025: Will Rates Drop?
  • Why Are Mortgage Rates So High and Predictions for 2025
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Economy, Financing, Mortgage Tagged With: economic recession, Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions

Today’s 5-Year Adjustable Rate Mortgage Jumps by 68 Basis Points – June 20, 2025

June 20, 2025 by Marco Santarelli

Today's 5-Year Adjustable Rate Mortgage Jumps by 68 Basis Points - June 20, 2025

Are you thinking about buying a home? Or maybe refinancing your existing mortgage? If so, you're probably keeping a close eye on mortgage rates. Today, June 20, 2025, we're seeing some movement in the market, particularly with Adjustable Rate Mortgages (ARMs). According to Zillow, the 5-year Adjustable Rate Mortgage, in particular, has risen significantly, climbing 68 basis points to an average of 7.62%. This means that if you're considering this type of loan, you'll be paying more than you would have just a week ago. Let's break down what's happening and what it might mean for you.

Today's 5-Year Adjustable Rate Mortgage Jumps by 68 Basis Points – June 20, 2025

While the 30-year fixed mortgage rate remains steady at 6.93%, and even the 15-year fixed rate saw a slight decrease to 5.97%, the jump in the 5-year ARM is definitely something to pay attention to. It highlights the dynamic nature of the mortgage market and the factors that influence interest rates.

Here's a quick overview of the key changes as of today:

  • 30-Year Fixed: 6.93% (No change from last week)
  • 15-Year Fixed: 5.97% (Down 0.03% from last week)
  • 5-Year ARM: 7.62% (Up 0.29% from last week)

Digging Deeper: Why the 5-Year ARM Increase Matters

You might be asking, “Okay, so the 5-year ARM went up. Why should I care?” Well, here's the deal: ARMs are different from fixed-rate mortgages. With a fixed-rate mortgage, your interest rate stays the same for the entire loan term (usually 15 or 30 years). With an ARM, the interest rate is fixed for a specific period (in this case, 5 years) and then adjusts periodically based on market conditions.

  • Initial Savings: ARMs often start with lower interest rates than fixed-rate mortgages. This can make them attractive to borrowers who are looking to save money on their initial monthly payments.
  • Risk of Rate Increases: However, the big risk is that your interest rate can go up after the initial fixed-rate period ends. If interest rates rise significantly, your monthly payments could increase substantially, potentially straining your budget.

Who is Considering ARMs

  • First time home buyers
  • People expecting to move within five years
  • People who believe interest rates will reduce in the future

The Impact on Homebuyers: Is a 5-Year ARM Still a Good Idea?

Given the rise in the 5-year ARM rate, it's crucial to carefully consider whether this type of loan is right for you. Here's what I would advise:

  • Assess Your Risk Tolerance: How comfortable are you with the possibility of your mortgage payments increasing in the future? If you're risk-averse, a fixed-rate mortgage might be a better option.
  • Consider Your Short-Term Plans: Do you plan to stay in your home for the long term? If you think you might move within the next 5 years, an ARM could be a good way to save money on interest during that time.
  • Evaluate Your Financial Situation: Can you afford to make higher mortgage payments if interest rates rise? It's essential to run the numbers and make sure you have enough wiggle room in your budget.

Understanding the Numbers: A Detailed Breakdown of Mortgage Rates

To give you a clearer picture, let's take a closer look at the different types of mortgage rates available today:

Table 1: Conforming Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate 6.93% 0.00% 7.38% 0.00%
20-Year Fixed Rate 6.79% Up 0.30% 7.14% Up 0.23%
15-Year Fixed Rate 5.97% Down 0.03% 6.27% Down 0.04%
10-Year Fixed Rate 5.87% Down 0.13% 6.23% Down 0.04%
7-year ARM 7.56% Up 0.24% 7.94% Up 0.02%
5-year ARM 7.62% Up 0.29% 8.00% Up 0.14%
3-year ARM — 0.00% — 0.00%

Table 2: Government Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate FHA 7.63% Up 0.80% 8.67% Up 0.82%
30-Year Fixed Rate VA 6.42% Up 0.02% 6.64% Up 0.03%
15-Year Fixed Rate FHA 5.63% Down 0.15% 6.59% Down 0.16%
15-Year Fixed Rate VA 5.97% Up 0.04% 6.33% Up 0.05%

Table 3: Jumbo Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate Jumbo 7.41% Up 0.07% 7.80% Up 0.05%
15-Year Fixed Rate Jumbo 6.82% Up 0.21% 7.01% Up 0.14%
7-year ARM Jumbo 7.53% 0.00% 8.06% 0.00%
5-year ARM Jumbo 7.74% Up 0.02% 8.08% Down 0.03%
3-year ARM Jumbo — 0.00% — 0.00%

Important Considerations Beyond the Interest Rate

  • APR (Annual Percentage Rate): Pay close attention to the APR, which includes not only the interest rate but also other fees and costs associated with the mortgage. The APR gives you a more accurate picture of the total cost of the loan.
  • Points: Lenders may charge points, which are upfront fees that you pay to lower your interest rate. One point is equal to 1% of the loan amount.
  • Closing Costs: Don't forget to factor in closing costs, which can include things like appraisal fees, title insurance, and recording fees.

Looking Ahead: What Could Happen Next?

Predicting the future of mortgage rates is always tricky. Several factors can influence rates, including:

  • The Overall Economy: If the economy is strong, interest rates may rise. If the economy is weak, interest rates may fall.
  • Inflation: High inflation can lead to higher interest rates.
  • Federal Reserve Policy: The Federal Reserve's decisions about interest rates can have a significant impact on mortgage rates.

Ultimately, the best approach is to stay informed, consult with a mortgage professional, and make a decision that aligns with your individual circumstances.

My Final Thoughts:

The rise in the 5-year ARM rate is a reminder that the mortgage market is constantly evolving. Don't let it scare you off from pursuing your homeownership goals, but do take the time to understand the risks and make informed decisions!

Remember, purchasing a home is a huge investment and it is necessary that all options are considered before jumping to any conclusion. And seek professional advice!

Capitalize on Lower ARM Rates Before They Rise Again

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

Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Financing, Mortgage Tagged With: Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions, Mortgage Rates Today

5-Year Adjustable Rate Mortgage Plunges Today by 23 Basis Points – June 19, 2025

June 19, 2025 by Marco Santarelli

5-Year Adjustable Rate Mortgage Plunges Today by 23 Basis Points - June 19, 2025

Trying to figure out the best way to finance a home can feel like navigating a maze, right? Well, here’s a little clarity for you on June 19, 2025: The national average for a 5-Year Adjustable Rate Mortgage (ARM) has dropped 23 basis points to 6.80%. This dip could be a welcome sign for some homebuyers, but let's dig deeper into what this means and whether an ARM is the right choice for you.

5-Year Adjustable Rate Mortgage Plunges Today by 23 Basis Points – June 19, 2025

Understanding the Current Mortgage Rate Environment

Before we zero in on the 5-year ARM, let's take a quick look at the broader mortgage rate picture. As of today, June 19, 2025, here's a snapshot:

  • 30-Year Fixed Rate: 6.93% (up 2 basis points from yesterday, equal to last week's average)
  • 15-Year Fixed Rate: 5.99% (up 3 basis points from yesterday)
  • 5-Year ARM: 6.80% (down 23 basis points from yesterday)

This data, provided by Zillow, gives us a good starting point to analyze the trends. The 30-year fixed rate, which is the most popular choice for homebuyers, saw a minor increase. The 15-year fixed rate also inched up. However, the notable movement is the decrease in the 5-year ARM rate.

Why the Drop in the 5-Year ARM Rate Matters

A 23-basis-point drop in the 5-year ARM rate is significant. But what exactly does it mean for potential homebuyers?

Firstly, it can translate to lower initial monthly payments compared to a 30-year fixed-rate mortgage. This can be attractive to buyers who are on a tight budget or expect their income to increase in the near future.

Secondly, it could signal a shift in the market's expectations for future interest rates. While predicting the future is impossible, movements like these often reflect underlying economic factors and investor sentiment.

Delving into Adjustable-Rate Mortgages (ARMs)

Let's break down exactly what an ARM is and how it works because, honestly, the name itself can sound a little intimidating. An ARM is a type of mortgage where the interest rate is not fixed for the entire loan term. Instead, it starts with a fixed rate period and then adjusts periodically based on a benchmark index.

The 5-year ARM, specifically, has a fixed interest rate for the first 5 years. After those 5 years, the interest rate will adjust annually based on a specific index, like the Secured Overnight Financing Rate (SOFR), plus a margin determined by the lender.

Here's a simplified example:

  • Let's say you get a 5-year ARM with an initial rate of 6.80%.
  • For the first 5 years, your interest rate stays at 6.80%.
  • After 5 years, the rate adjusts. The adjustment is based on the index (let's say SOFR currently at 5%) plus a margin (let's say 2.5%).
  • Your new interest rate would be 5% (SOFR) + 2.5% (margin) = 7.5%.

It is worthy to note that ARMs usually come with caps on how much the interest rate can increase at each adjustment and over the life of the loan. These caps are crucial to understand because they limit your potential exposure to rising rates.

Who Should Consider a 5-Year ARM?

A 5-year ARM isn't for everyone. It's important to carefully consider your financial situation and future plans before opting for one. Here are some scenarios where a 5-year ARM might be a good fit:

  • You plan to move or refinance within 5 years: If you don't anticipate staying in the home for more than 5 years, the adjustable rate aspect might not affect you.
  • You expect your income to increase significantly: If you believe your income will rise in the future, you might be comfortable with the risk of a potential rate increase.
  • You’re comfortable with some level of risk: ARMs inherently involve more risk than fixed-rate mortgages. If you're risk-averse, a fixed-rate might be a better choice.
  • You want a lower initial interest rate: ARMs typically offer lower initial interest rates than fixed-rate mortgages, which can result in lower monthly payments during the fixed-rate period.

The Risk Factor: Interest Rate Adjustments

The biggest concern with ARMs is the possibility of rising interest rates. If interest rates increase after the fixed-rate period, your monthly payments could go up, potentially straining your budget.

To mitigate this risk, it's essential to:

  • Understand the index and margin: Know which index your ARM is tied to and what the margin is. This will help you estimate potential rate adjustments.
  • Know the rate caps: Pay close attention to the periodic and lifetime rate caps. These caps limit how much your interest rate can increase.
  • Stress test your budget: Evaluate whether you can afford your mortgage payments if the interest rate rises to the maximum cap.

Comparing Different Mortgage Options

Here's a quick comparison of different mortgage types to help you make an informed decision:

Feature 30-Year Fixed Rate 15-Year Fixed Rate 5-Year ARM
Interest Rate Fixed Fixed Initially Fixed, then Adjustable
Loan Term 30 years 15 years Varies
Monthly Payments Lower Higher Lower initially, potentially higher later
Overall Cost Higher Lower Can be lower or higher depending on rate adjustments
Risk Lower Lower Higher
Suitability Long-term homebuyers, risk-averse individuals Those who want to pay off their mortgage quickly, have a stable income Short-term homebuyers, those who expect their income to increase, comfortable with risk

Beyond the Numbers: Other Factors to Consider

Mortgage rates are important, but they're not the only factors to consider when buying a home. It is important to consider the following:

  • Your credit score: A higher credit score typically qualifies you for lower interest rates.
  • Your down payment: A larger down payment can reduce your loan amount and potentially lower your interest rate.
  • Closing costs: Don't forget to factor in closing costs, which can include appraisal fees, title insurance, and other expenses.
  • Your long-term financial goals: Consider how your mortgage fits into your overall financial plan.

Also Read:

Fixed vs. Adjustable Rate Mortgage in 2025: Which is Best for You?

5-Year Adjustable Rate Mortgage Drops by 21 Basis Points on June 17, 2025

My Take

As a homeowner, investor, and someone who's followed the mortgage market for years, I've seen firsthand how these rates can impact people's lives. While the 23-basis-point drop in the 5-year ARM is noteworthy, it's important to approach ARMs with caution.

From what I have seen from the past, I have noticed that people often get lured into ARMs because of the lower initial rates, only to get shocked by the rate adjustments afterward. Always do your homework, understand the risks, and make sure you can comfortably afford the payments, even if rates rise. It's also helpful to consult with a mortgage professional who can provide personalized advice based on your unique situation.

Final Thoughts: The decrease in the 5-year Adjustable Rate Mortgage rate presents an intriguing option for prospective homeowners. However, it is critical, let me repeat that, CRITICAL to balance the potential benefits with the inherent risks. Thorough research, careful planning, and professional guidance are essential to ensure that you make the best decision for your financial future. As always, focus on your personal needs and make a decision based on that.

Capitalize on Lower ARM Rates Before They Rise Again

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

Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Financing, Mortgage Tagged With: Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions, Mortgage Rates Today

Will Mortgage Rates Go Down After No Cut by Fed in June 2025?

June 19, 2025 by Marco Santarelli

Will Mortgage Rates Go Down After No Cut by Fed in June 2025?

It looks like mortgage rates might not take a big dive right after the Federal Reserve decided on June 18, 2025, to keep their main interest rate steady between 4.25% and 4.5%. From what I'm seeing, there's a chance we could see some decreases later in 2025 because the Fed is talking about making two small cuts to interest rates. But, whether that actually happens and when will really depend on how well inflation cools down and what the overall economy does. There's some debate among the experts, and a few think that high inflation could even push those rate cuts further down the road.

Will Mortgage Rates Go Down After No Cut by Fed in June 2025?

Understanding the Fed's Latest Move

On June 18, 2025, the Federal Open Market Committee (FOMC), which is the group within the Federal Reserve that makes decisions about interest rates, announced that they would keep the federal funds rate where it is, between 4.25% and 4.5% (Federal Reserve FOMC Statement June 18, 2025). This rate is what banks charge each other for lending money overnight. Even though it's not the same as mortgage rates, it has an impact on them and other borrowing costs in our economy.

This decision tells me that the Fed is being careful. They want to see more evidence that inflation, which is still a bit too high, is really coming under control. They're also probably keeping an eye on how the economy is growing, especially with things like the new tariffs that were recently introduced.

What's interesting is that even though they kept the rates the same, the Fed's own forecasts, often shown in what's called a “dot plot,” suggest they still expect to make two small quarter-point (0.25%) rate cuts before the end of 2025. However, they also upped their prediction for inflation in 2025, now thinking it will be around 3%, which is higher than the 2.7% they thought back in March. This makes me think those planned rate cuts aren't set in stone and could be pushed back if inflation doesn't cooperate.

How This Affects What You Pay for a Mortgage

Right now, mortgage rates are sitting at a level that's lower than the highest we've seen recently, but still pretty high when you look back over the years. For example, the average rate for a 30-year fixed-rate mortgage is somewhere between 6.81% and 6.89% as of June 18, 2025. A 15-year fixed-rate mortgage is averaging around 5.96%. To put this in perspective, back in March 2022, you could get a 30-year fixed rate for around 4.29%, so we've seen a pretty significant jump since then.

Here's a quick look at the current situation:

  • 30-year fixed-rate mortgage: 6.81% – 6.89% (down a bit from a high of 7.16% in May 2025)
  • 15-year fixed-rate mortgage: 5.96% (a little lower than last year's 6.13%)

The fact that mortgage rates have dipped a little recently isn't necessarily because of anything the Fed has directly done. It often has more to do with what's happening with U.S. Treasury bond yields and how much demand there is for mortgage-backed securities. This shows you that mortgage rates are influenced by a lot of different things, not just the Fed's main interest rate.

What the Experts Are Saying

I've been reading what various economists and analysts are thinking, and it's a mixed bag, to be honest. Lawrence Yun, who is the chief economist at the National Association of Realtors, doesn't think we'll see mortgage rates go down much in the near future because inflation is still a concern and there's a lot of uncertainty in the economy.

On the other hand, David Kelly from JPMorgan Asset Management believes that even though the Fed is signaling they might hold rates higher for a while, the market is already expecting future rate cuts. This expectation could actually push mortgage rates down a bit later in the year (The Street).

However, some analysts at Barclays are suggesting that if inflation stays stubbornly high, the Fed might only end up making one rate cut in 2025, which would mean less relief for people hoping for lower mortgage rates. Looking back at 2024, the Fed actually cut rates three times, but mortgage rates still bounced around quite a bit, which reminds us that other economic factors play a big role.

More Than Just the Fed: Other Things That Move Mortgage Rates

It's crucial to remember that the Fed's federal funds rate is just one piece of the puzzle when it comes to mortgage rates. The yield on the 10-year U.S. Treasury note is another really important factor. Mortgage rates often follow the trend of these Treasury yields. The recent small decrease in mortgage rates, even with the Fed holding its rate steady, suggests that things like lower Treasury yields or maybe more people wanting to invest in mortgage-backed securities are having an influence.

Here are some of the key things that will be shaping where mortgage rates go in the coming months:

  • How Inflation Is Doing: If prices start to rise at a slower pace and get closer to the Fed's 2% goal, then we're more likely to see those planned rate cuts happen, which could lead to lower mortgage rates towards the end of 2025. But if inflation stays around 3% or even higher, the Fed might hold off on those cuts, keeping mortgage rates higher.
  • The Speed of Economic Growth: The Fed is worried that the economy might slow down, partly because of new tariffs. If the economy does slow more than expected, it could push Treasury yields down, and that might put some downward pressure on mortgage rates.
  • What's Happening in the Market: How many investors want to buy mortgage-backed securities and how Treasury yields are moving up or down will continue to affect mortgage rates, sometimes even regardless of what the Fed decides to do.

This whole situation is pretty complex, and it shows why it's hard to predict exactly what will happen with mortgage rates. It really depends on a combination of what the Fed does and what's happening with the broader economy.

Looking Ahead: What This Means for You

For the time being, with the Fed keeping rates steady, I don't expect to see any big drops in mortgage rates right away. The fact that the Fed is still talking about making a couple of small rate cuts later in 2025 does offer some hope that we might see rates come down a bit. If those cuts happen, it could bring the federal funds rate down to somewhere between 3.75% and 4.0%, which would probably lead to lower mortgage rates. However, we need to see the economic data, especially inflation numbers, to know if and when that will actually happen.

So, while there's a possibility of mortgage rates easing later in 2025, I think it's more likely they'll stay around where they are now, or maybe even edge a bit higher in the short term, unless the economic news starts to show a clear cooling of inflation.

My Advice for Anyone Thinking About Buying or Refinancing

If you're looking to buy a home right now, it's a tricky situation. Rates around 6.81% are definitely better than the recent highs, so if you find a home you love and the numbers work for your budget, it might be worth considering locking in a rate. It's hard to say for sure if rates will go much lower in the near future.

If you already own a home and have a mortgage with a higher interest rate, it makes sense to keep an eye on where rates are headed. If the Fed does follow through with those rate cuts later in 2025 and mortgage rates drop below your current rate (taking into account any costs associated with refinancing), it could be a good opportunity to save some money on your monthly payments. Staying informed about inflation and any announcements from the Federal Reserve will be key to knowing when might be the right time to act.

In Conclusion

To sum it up, the Fed's decision on June 18, 2025, to hold interest rates steady means we probably won't see an immediate drop in mortgage rates, which are currently around 6.81% to 6.89% for a 30-year fixed loan. While there's still a possibility that mortgage rates could decrease later in 2025 if inflation cools down and the Fed makes its planned rate cuts, it's a situation we'll need to watch closely. For now, it seems like mortgage rates will likely remain at their current levels, and anyone looking to buy or refinance should carefully consider their options and stay informed about economic developments.

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 

Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • 30-Year Mortgage Rate Forecast for the Next 5 Years
  • 15-Year Mortgage Rate Forecast for the Next 5 Years
  • Why Are Mortgage Rates Going Up in 2025: Will Rates Drop?
  • Why Are Mortgage Rates So High and Predictions for 2025
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Financing, Mortgage Tagged With: Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions

U.S. States With Lowest Mortgage Rates Today – June 18, 2025

June 18, 2025 by Marco Santarelli

States With Lowest Mortgage Rates Today – June 18, 2025

Looking for the best mortgage rate today? As of today, June 18, 2025, the states boasting the cheapest 30-year new purchase mortgage rates are New York, California, Colorado, Florida, Connecticut, Massachusetts, New Jersey, Pennsylvania, Utah, and Washington These states offer average rates between 6.67% and 6.89%. Let's dive into what's influencing these rates and why it matters to you.

States With Lowest Mortgage Rates Today – June 18, 2025

Why Mortgage Rates Vary by State: A Deep Dive

It's easy to assume that mortgage rates are universal, but that's simply not the case. I've seen firsthand how localized factors can impact the rates offered to borrowers. Here's a breakdown of the key reasons why mortgage rates differ from state to state:

  • Lender Presence: Not all lenders operate nationwide. You'll find regional banks and credit unions that focus on specific states. The level of competition in your state directly influences rates. More competition often translates to lower rates for you.
  • Credit Score Averages: Surprisingly, the average credit score in a state can affect rates. States with higher average credit scores are often perceived as less risky, potentially leading to slightly lower rates overall.
  • Average Loan Size: The size of the average mortgage in a state plays a role. If people in a certain state are purchasing larger, more expensive homes, the risk assessment and rates might fluctuate accordingly.
  • State-Specific Regulations: Each state has its own set of regulations governing the mortgage industry. These regulations can affect the cost of doing business for lenders, which can then be reflected in the rates they offer.
  • Lender Risk Management: Every lender has its own internal risk assessment and management strategies. This means that two lenders operating in the same state, serving the same borrower profile, might offer slightly different rates.

The variations above underscore the absolute necessity of shopping around for the best mortgage. Don't simply settle for the first rate you see. Take the time to compare offers from multiple lenders – banks, credit unions, and online mortgage brokers. I can't stress this enough; this is the single biggest thing you can do to potentially save thousands of dollars over the life of your loan.

Understanding National Rate Trends: The Big Picture

While state-specific rates are important, it's also helpful to understand the broader national trends. Currently, the national average for a 30-year new purchase mortgage is 6.91%. This is a slight dip from a mid-May peak of 7.15% but still higher than the 6.50% we saw in March 2025. Remember the two-year low we witnesses in Septemebr of 2024? I do. We're far away from those historic lows.

Here's a quick snapshot of national averages for different loan types as provided by Zillow:

  • 30-Year Fixed: 6.91%
  • FHA 30-Year Fixed: 7.50%
  • 15-Year Fixed: 5.95%
  • Jumbo 30-Year Fixed: 6.89%
  • 5/6 ARM: 7.06%

States With The Most Affordable Mortgage Rates

According to Investopedia, the following states have the cheapest 30-year new purchase mortgage rates today:

  • New York: Average rates around 6.67%.
  • California: Average rates around 6.72%.
  • Colorado: Average rates around 6.75%.
  • Florida: Average rates around 6.78%.
  • Connecticut: Average rates around 6.80%.
  • Massachusetts: Average rates around 6.82%.
  • New Jersey: Average rates around 6.85%.
  • Pennsylvania: Average rates around 6.86%.
  • Utah: Average rates around 6.87%.
  • Washington: Average rates around 6.89%.

States Reporting The Highest Mortgage Rates

On the flip side, these states are reporting the highest 30-year average mortgage rates.

  • Alaska: Rates averaging around 6.96%.
  • West Virginia: Average hovered around 6.98%.
  • Maine: Rates near 6.99%.
  • Mississippi: Rates recorded at 7.01%.
  • Montana: Mortgage rates averaged to 7.02%.
  • Rhode Island: Averages around 7.02%.
  • North Dakota: Also near 7.03%.
  • South Dakota: Rates around 7.04%.
  • Vermont: Averages around 7.04%.
  • Wyoming: Rates near 7.05%.

Decoding Mortgage Jargon: Beyond the Teaser Rates

You've probably seen tempting “teaser rates” advertised online. It's crucial to understand that these are often cherry-picked and might not reflect the reality for most borrowers. Teaser rates might come with conditions like:

  • Paying points upfront (essentially pre-paying interest)
  • Requiring an exceptionally high credit score
  • Applying to smaller-than-typical loan amounts

Remember this: the ultimate rate you secure is based on your individual circumstances – credit score, income, debt-to-income ratio, and the specific loan product you choose.

What Drives Mortgage Rate Fluctuations? The Macro View

Mortgage rates don't exist in a vacuum. They're influenced by several macroeconomic factors, including:

  • The Bond Market: Keep a close watch on the bond market, especially the 10-year Treasury yield. Mortgage rates tend to track the movement of these yields.
  • Federal Reserve Policy: The Federal Reserve's monetary policy decisions have a significant impact. The Fed's actions regarding bond buying and funding government-backed mortgages play a crucial role.
  • Competition: As mentioned earlier, competition among lenders – both traditional and online – impacts rates.

As Investopedia points out, it is difficult to attribute rate changes to one specific factor. These elements interact, so it's more like a complex recipe than a simple equation.

The Fed's Role: A Quick Recap

Let's briefly look at the Fed's actions over the past few years. The article also pointed this out, and I think its important to summarize it here:

  • The Fed ended its bond-buying program in March 2022.
  • It aggressively raised the federal funds rate to combat inflation.
  • It began cutting rates, albeit slowly, with a notable pause occurring in early 2025.

Read More:

States With the Lowest Mortgage Rates on June 17, 2025

Are Mortgage Rates Expected to Go Down Soon: A Realistic Outlook

Looking Ahead: What Does the Future Hold?

Predicting future mortgage rates is like predicting the weather – never a sure thing! However, by keeping an eye on the factors discussed above – bond market trends, inflation data, and Federal Reserve policy announcements – you can get a sense of where rates might be headed. Real estate investors, pay close attention to the economic releases that impact bond yields.

Final Thoughts:

The mortgage market can seem overwhelming, but by understanding the key factors that influence rates and taking the time to shop around, you can make informed decisions. Remember, buying a home is one of the biggest financial decisions you'll ever make. Don't be afraid to ask questions, seek professional advice, and do your homework. Good luck!

Invest in Real Estate in the Top U.S. Markets

Investing in turnkey real estate can help you secure consistent returns with fluctuating mortgage rates.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now

Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • 30-Year Mortgage Rate Forecast for the Next 5 Years
  • 15-Year Mortgage Rate Forecast for the Next 5 Years
  • Why Are Mortgage Rates Going Up in 2025: Will Rates Drop?
  • Why Are Mortgage Rates So High and Predictions for 2025
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Financing, Mortgage Tagged With: Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions, Mortgage Rates Today

U.S. States With Lowest Mortgage Rates Today – June 17, 2025

June 17, 2025 by Marco Santarelli

U.S. States With Lowest Mortgage Rates Today – June 17, 2025

Looking for the best deal on a mortgage? You've come to the right place. As of today, June 17, 2025, the U.S. states with the lowest mortgage rates for a 30-year new purchase are New York, Florida, Colorado, New Jersey, California, Washington, and Connecticut. In these states, you can find average rates between 6.81% and 6.91%.

U.S. States With Lowest Mortgage Rates Today – June 17, 2025

Why Do Mortgage Rates Vary by State?

You might wonder why mortgage rates aren't the same across the entire country. The truth is, several factors contribute to these state-by-state differences. Variation happens due to these influences:

  • Different Lenders in Different Regions: Not all lenders operate in every state. This means the level of competition can vary, influencing the rates each lender offers.
  • State-Level Credit Score Variations: The average credit score within a state can impact rates. States with higher average scores might see slightly better rates.
  • Average Loan Size: The typical loan amount requested in a state can also play a role.
  • State Regulations: Mortgage regulations can differ from state to state, affecting the costs for lenders and ultimately the rates they offer.
  • Lender Risk Management Strategies: Each lender has its unique approach to assessing and managing risk, which impacts the rates they’re willing to offer.

The Winners: States with the Lowest Mortgage Rates Today

Let's dive into the states where you'll find the most attractive mortgage rates right now. According to data by Investopedia, these are the stars of the show as of June 17, 2025:

  • New York: Average rates between 6.81% and 6.91%.
  • Florida: Average rates between 6.81% and 6.91%.
  • Colorado: Average rates between 6.81% and 6.91%.
  • New Jersey: Average rates between 6.81% and 6.91%.
  • California: Average rates between 6.81% and 6.91%.
  • Washington: Average rates between 6.81% and 6.91%.
  • Connecticut: Average rates between 6.81% and 6.91%.

Heads Up: States With Higher Mortgage Rates

On the other end of the spectrum, some states are currently experiencing higher mortgage rates. If you're planning to buy a home in these areas, it's especially important to shop around for the best deal. These are the states at the higher end:

  • Alaska: Average rates between 6.99% and 7.08%
  • West Virginia: Average rates between 6.99% and 7.08%
  • Mississippi: Average rates between 6.99% and 7.08%
  • North Dakota: Average rates between 6.99% and 7.08%
  • Kansas: Average rates between 6.99% and 7.08%
  • South Dakota: Average rates between 6.99% and 7.08%
  • Wyoming: Average rates between 6.99% and 7.08%

National Averages: Where Do We Stand?

It's helpful to keep an eye on national average mortgage rates to put your state's rates into perspective. Here's a snapshot of the national averages as of today from Zillow:

  • 30-Year Fixed (New Purchase): 6.93%
  • FHA 30-Year Fixed: 7.42%
  • 15-Year Fixed: 5.98%
  • Jumbo 30-Year Fixed: 6.95%
  • 5/6 ARM: 7.13%

Important: Don't Believe Everything You See Online

You've probably seen those super-low “teaser rates” advertised online. While they might look tempting, it's crucial to understand the fine print. These rates often come with catches like:

  • Paying points upfront
  • Requiring an exceptionally high credit score
  • Being limited to very small loan amounts

Remember, the rate you actually qualify for will depend on your individual circumstances, including your credit score, income, debt-to-income ratio, and the size of your down payment.

Quick Tip: Always shop around! Don't settle for the first rate you're offered. Get quotes from multiple lenders to ensure you're getting the best possible deal.

How to Find the Best Mortgage Rate for You

Okay, so you know where the lowest rates generally are. But how do you make sure you get the best rate possible for your situation? Here's a breakdown:

  1. Check Your Credit Score: Your credit score is a huge factor in determining your interest rate. The higher your score, the lower your rate will likely be. Get a copy of your credit report from all three major credit bureaus (Equifax, Experian, and TransUnion) and dispute any errors you find.
  2. Save for a Larger Down Payment: A larger down payment reduces the lender's risk, often resulting in a lower interest rate. Aim for at least 20% if possible.
  3. Shop Around for Lenders: Don't just go with the first lender you talk to. Get quotes from at least three different lenders to compare rates and fees. Online mortgage brokers can be a great way to compare multiple lenders at once.
  4. Consider an ARM (Adjustable-Rate Mortgage): If you plan to move in a few years, an ARM might be a good option. These typically have lower initial interest rates than fixed-rate mortgages, but the rate can change over time.
  5. Negotiate Fees: Don't be afraid to negotiate lender fees. Some fees are negotiable, so it's worth asking if the lender is willing to lower them.
  6. Get Pre-Approved: Getting pre-approved for a mortgage shows sellers that you're a serious buyer and know how much you can borrow. It can also give you a stronger negotiating position.

Read More:

States With the Lowest Mortgage Rates on June 16, 2025

Are Mortgage Rates Expected to Go Down Soon: A Realistic Outlook

A Quick Look at Mortgage Rate History and the Future

Mortgage rates are constantly in flux, influenced by a complex interplay of economic factors. It’s worth remembering where we've been recently:

  • Mid-May 2025: Rates hit a one-year high of 7.15%.
  • March 2025: Rates dipped to their lowest of the year at 6.50%.
  • September (of a previous year): Rates hit a two-year low of 5.89%.

Understanding these trends can give you a bit of context when you're deciding when to lock in your rate.

Factors Influencing Mortgage Rates

What drives these fluctuations? A few key factors are always at play:

  • The Bond Market: Mortgage rates often closely follow the yields on 10-year Treasury bonds.
  • The Federal Reserve: The Fed's monetary policy, particularly its bond-buying programs and decisions about the federal funds rate, has a significant impact. Though the fed funds rate doesn't directly influence mortgage rates, they are closely linked,
  • Competition Among Lenders: The level of competition in the mortgage industry can influence rates.

Mortgage Rate Volatility

It's tricky to pinpoint exactly why rates change on any given day, because all these factors can shift simultaneously. The Federal Reserve has indicated a more cautious approach to rate cuts in the coming months, after reducing rates in Q3 and Q4 of 2024 – and no changes happening in the new year of 2025 just yet. So we may see more rate pauses than cuts through the rest of 2025.

The Bottom Line:

Finding the best mortgage rate requires research, preparation, and a willingness to shop around. By understanding the factors that influence rates and taking steps to improve your credit and financial profile, you can increase your chances of securing a favorable deal. I wish you the best of luck in your home-buying journey!

Invest in Real Estate in the Top U.S. Markets

Investing in turnkey real estate can help you secure consistent returns with fluctuating mortgage rates.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now

Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • 30-Year Mortgage Rate Forecast for the Next 5 Years
  • 15-Year Mortgage Rate Forecast for the Next 5 Years
  • Why Are Mortgage Rates Going Up in 2025: Will Rates Drop?
  • Why Are Mortgage Rates So High and Predictions for 2025
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Financing, Mortgage Tagged With: Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions, Mortgage Rates Today

5-Year Adjustable Rate Mortgage Drops Today by 21 Basis Points – June 17, 2025

June 17, 2025 by Marco Santarelli

5-Year Adjustable Rate Mortgage Today Drops by 21 Basis Points - June 17, 2025

If you're following the mortgage market closely, you'll want to know this: On June 17, 2025, the national average 5-year Adjustable Rate Mortgage (ARM) rate experienced a notable decrease, dropping by 21 basis points to 7.18%. This shift presents both opportunities and considerations for prospective homebuyers and those looking to refinance. Is now a good time to take advantage of an ARM? Let's dig into what this means for you.

5-Year Adjustable Rate Mortgage Drops Today by 21 Basis Points – June 17, 2025

It's been a pretty wild ride for mortgage rates lately, hasn't it? Jumps, dips, and flatlines – keeping up is a job in itself! Today's report from Zillow offers a snapshot of where we stand, and while the 30-year fixed rate remains stubbornly stable at 6.93%, the movement we're seeing in ARM rates is definitely worth noting.

Here's a quick rundown of the key takeaways from today's data:

  • 30-Year Fixed Rate: Still holding steady at 6.93%. Predictable, but not exactly thrilling.
  • 15-Year Fixed Rate: A slight decrease of 2 basis points, landing at 5.99%.
  • 5-Year ARM: The star of the show, with a 21 basis point drop to 7.18%.
  • Other ARM rates are still high with a 7-year ARM seeing 7.63%.

To give you a clearer picture I have compiled the latest mortgage rates provided by Zillow

Here is a Summary of Conforming Loans:

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate 6.93% 0.00% 7.37% down0.01%
20-Year Fixed Rate 6.58% up0.09% 6.91% 0.00%
15-Year Fixed Rate 5.99% down0.02% 6.28% down0.03%
10-Year Fixed Rate 5.87% down0.13% 6.23% down0.04%
7-year ARM 7.63% up0.30% 8.09% up0.17%
5-year ARM 7.18% down0.15% 7.71% down0.15%
3-year ARM — 0.00% — 0.00%

Here is a Summary of Government Loans:

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate FHA 7.26% up0.43% 8.30% up0.44%
30-Year Fixed Rate VA 6.48% up0.08% 6.70% up0.08%
15-Year Fixed Rate FHA 5.52% down0.26% 6.48% down0.27%
15-Year Fixed Rate VA 5.94% up0.01% 6.29% up0.01%

Here is a Summary of Jumbo Loans:

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate Jumbo 7.30% down0.03% 7.70% down0.05%
15-Year Fixed Rate Jumbo 6.67% up0.06% 6.90% up0.02%
7-year ARM Jumbo 7.53% 0.00% 8.06% 0.00%
5-year ARM Jumbo 7.53% down0.19% 8.05% down0.06%
3-year ARM Jumbo — 0.00% — 0.00%

Why the Drop in ARM Rates Matters

A 21 basis point decrease might not seem like a massive change, but it can translate to real savings over time. More importantly, it signals a potential shift in market sentiment. Here’s the breakdown of why this drop warrants attention:

  • Lower Initial Payments: ARMs typically offer lower initial interest rates compared to fixed-rate mortgages. This can make homeownership more accessible, especially for first-time buyers or those with tighter budgets.
  • Potential Savings: If interest rates remain stable or decrease during the initial fixed-rate period of the ARM (in this case, 5 years), borrowers could save a significant amount of money compared to a fixed-rate mortgage.
  • More Buying Power: A lower initial rate means you can often qualify for a larger mortgage, opening up possibilities for a wider range of homes.

The ARM Advantage: Is It Right for You?

Okay, so ARMs are tempting, but they aren't for everyone. The big question is whether you're comfortable with the potential for interest rate adjustments after the initial fixed-rate period. Here's how to figure out if a 5-year ARM might be a good fit:

  • Short-Term Homeownership: Are you planning to move within the next 5-7 years? If so, an ARM could be a great way to save money during your time in the home. You’ll get the benefit of the lower rate without risking a rate hike.
  • Rate Hike Tolerance: Ask yourself what will happen if the rates were to go up? Do you have the capability to pay extra? Can you absorb any increase?
  • Refinancing Strategy: If your plan is to refinance into a fixed-rate mortgage before the ARM adjusts, a 5-year ARM could make sense. However, keep in mind that refinancing isn't always guaranteed, and you'll need to factor in closing costs.
  • Financial Stability: It is important that you have stable finances to absorb any mortgage costs. This strategy would not be for you, if you are not financially stable.

Also Read:

Fixed vs. Adjustable Rate Mortgage in 2025: Which is Best for You?

Fixed Rate Still King: Why Stability Still Holds Appeal

Despite the allure of a lower initial rate, fixed-rate mortgages remain the most popular choice for many borrowers. Here's why:

  • Predictability: With a fixed-rate loan, you know exactly what your monthly payments will be for the entire loan term. This provides peace of mind and makes budgeting easier.
  • Protection Against Rising Rates: If interest rates rise, your mortgage rate stays the same. This can save you a lot of money in the long run.
  • Long-Term Security: If you plan to stay in your home for the long haul, a fixed-rate mortgage can provide long-term financial security.

My Thoughts:

As a seasoned market watcher, I can tell you that making a decision regarding a mortgage is never easy. It's always a gamble. The current situation is tough. The economy can change on a dime. So, before you decide on whether an ARM is right for you, make sure you speak to a financial advisor.

I've seen people save a ton of money by playing the ARM game right, but I've also seen people get burned when rates climbed unexpectedly. So, it's all about knowing your risk tolerance and doing your homework. To break it down for you:

  • Don't just chase the lowest rate. Look at the big picture – your financial goals, your job security, and your long-term plans.
  • Shop around for the best deal. Don't settle for the first offer you get. Talk to multiple lenders and compare rates, fees, and terms.
  • Read the fine print. Make sure you understand all the terms and conditions of the mortgage, including the adjustment caps on the ARM.

Weighing Your Options

The drop in the 5-year ARM rate on June 17, 2025, is a noteworthy event that could benefit certain homebuyers. However, it's crucial to carefully weigh the pros and cons of ARMs versus fixed-rate mortgages before making a decision. Consider your financial situation, your risk tolerance, and your long-term goals.

Remember, there's no one-size-fits-all answer when it comes to mortgages. What works for your neighbor might not work for you. Take the time to research your options, consult with a mortgage professional, and make an informed decision that's right for your individual circumstances. With a little bit of planning and preparation, you can navigate the mortgage market with confidence and achieve your homeownership dreams.

Capitalize on Lower ARM Rates Before They Rise Again

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

Also Read:

  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Expect High Mortgage Rates Until 2026: Fannie Mae's 2-Year Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rates Predictions for Next 2 Years
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Financing, Mortgage Tagged With: Interest Rate, mortgage, Mortgage Rate Trends, mortgage rates, Mortgage Rates Predictions, Mortgage Rates Today

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