Introduction to US Mortgage Rates
The average rate on a 30-year U.S. mortgage eased this week, offering little relief for prospective homebuyers facing record-high home prices. The long-term rate slipped to 6.74% from 6.75% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.78%.
By ALEX VEIGA
Current Mortgage Rate Trends
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased. The average rate dropped to 5.87% from 5.92% last week. A year ago, it was 6.07%, Freddie Mac said. Elevated mortgage rates have been weighing on the U.S. housing market, which has been in a sales slump going back to 2022, when rates started to climb from the rock-bottom lows they reached during the pandemic.
Impact on the Housing Market
Sales of previously occupied U.S. homes, which sank to their lowest level in nearly 30 years in 2024, have remained sluggish this year as rising home prices and stubbornly high mortgage rates have made homeownership financially untenable for many Americans. Elevated mortgage rates are also discouraging many homeowners from selling because they locked in mortgage rates when they were much lower.
Factors Influencing Mortgage Rates
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. The main barometer is the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield was at 4.41% at midday Thursday, down from 4.40% late Wednesday, following the latest signals that the U.S. economy seems to be holding up OK despite all the pressures on it from tariffs and elsewhere.
Economic Pressures and Mortgage Rates
Yields have moved higher for most of this month as traders bet that the Fed will hold its key short-term interest rate steady at its upcoming meeting next week, despite President Donald Trump demanding that the Fed to lower rates. A less independent Fed could mean lower short-term rates, which influence the interest consumers pay on credit cards and auto loans, but it could have the opposite effect on the longer-term bond yields that influence the rates on home loans.
Historical Context of Mortgage Rates
The average rate on a 30-year mortgage has remained relatively close to its high so far this year of just above 7%, set in mid-January. The 30-year rate’s low point this year was in early April when it briefly dipped to 6.62%.
Conclusion
In conclusion, the average long-term US mortgage rate easing to 6.74% brings little comfort to prospective homebuyers and the housing market as a whole. With record-high home prices and stubbornly high mortgage rates, the market continues to face challenges. The influence of the Federal Reserve and economic factors on mortgage rates will be crucial in determining the future of the housing market.
FAQs
Originally Published: July 24, 2025 at 12:28 PM EDT
Q: What is the current average rate on a 30-year U.S. mortgage?
A: The average rate on a 30-year U.S. mortgage eased to 6.74% from 6.75% last week.
Q: How have elevated mortgage rates affected the U.S. housing market?
A: Elevated mortgage rates have been weighing on the U.S. housing market, leading to a sales slump since 2022.
Q: What factors influence mortgage rates?
A: Mortgage rates are influenced by the Federal Reserve’s interest rate policy decisions, bond market investors’ expectations for the economy and inflation, and the 10-year Treasury yield.
