Mortgage Rates Today Drop Below 7% for First Time Since 2023—Here’s What It Means for You

Mortgage Rates Tick Lower on August 1 2025 as Fed Pause Extends The average 30-year fixed mortgage rate slipped to 6.72 % today, down two basis points from last week’s 6.74 % reading, according to Freddie Mac’s latest Primary Mortgage Market Survey. Daily lender data shows modest movement across most loan terms, keeping borrowing costs near their narrow summer range. 30-Year Fixed Rates • National average: 6.72 % (0.24 % fees/points) • Jumbo 30-year: 6.82 % • FHA 30-year: 6.49 % • VA 30-year: 6.29 % 15-Year and Adjustable-Rate Loans • 15-year fixed average: 5.85 % • 5/1 ARM average: 7.07 % • 7/1 ARM average: 7.49 % Why Rates Are Stuck in Neutral July’s Federal Reserve meeting ended with policymakers leaving the benchmark federal-funds rate unchanged for a fifth straight time, in a target range of 4.25 %-4.50 %. Officials signaled they need “greater confidence” that inflation is cooling before cutting borrowing costs, keeping long-term yields—including mortgage rates—anchored near recent highs. Treasury yields responded with only modest declines, and the 10-year note—closely tied to fixed mortgage pricing—continues to trade around 4.05 %-4.15 %. Until investors see weaker labor data or a sharper drop in core inflation, analysts expect 30-year mortgage rates to hover in the mid-6 % range through late summer. Market Snapshot: Rate Volatility Remains Low • The spread between the 30-year fixed mortgage rate and the 10-year Treasury yield is 2.6 percentage points, wider than the pre-pandemic norm of about 1.7 points. • Lenders report strong competition for high-credit borrowers, leading to occasional day-to-day swings of 0.05 %-0.10 %. • Rate locks for 60 days are pricing roughly 10 basis points above 30-day locks as pipelines lengthen. Housing Impact Persistently elevated rates continue to chill home-buying demand. Mortgage application volume is 18 % below the same week last year, with purchase activity off 15 % and refinances down 24 %, per the Mortgage Bankers Association. New-listing growth is improving but still trails 2019 levels, keeping upward pressure on home prices in many metro areas. What Borrowers Can Do Now 1. Compare conventional and government-backed quotes. Today’s FHA and VA rates can run 20-40 basis points lower than comparable conventional loans for qualified buyers. 2. Consider a shorter term. The 15-year fixed is running almost a full percentage point beneath the 30-year, trimming total interest costs for homeowners who can handle the higher monthly payment. 3. Watch the job market. A weaker August payrolls report could nudge bond yields—and mortgage rates—lower. Lock if you see a favorable dip. Rate Outlook for Fall 2025 Forecasting agencies Fannie Mae and MBA both project the 30-year fixed to end 2025 in the mid-6 % range, with the first Fed rate cuts expected in September and December. Economists caution that any material decline hinges on continued disinflation and an orderly slowdown in growth. Bottom Line Mortgage rates today remain historically high but stable, giving buyers and refinancers a slimmer window to capture small daily dips. With the Federal Reserve on hold and inflation slowly moving in the right direction, incremental relief could arrive later in the year—but borrowers should be ready to seize opportunities as soon as they appear.