Mortgage Rates Fall to Lowest Level in Nearly a Year

Strategic Insights -

As the Federal Reserve prepares to cut interest rates for the first time this year, the average rate on a 30-year U.S. mortgage has fallen to its lowest level in nearly a year, reflecting a pullback in Treasury yields. The long-term rate eased to 6.35% from 6.5% last week, with borrowing costs on 15-year fixed-rate mortgages also declining. The rate on a 15-year mortgage slipped to 5.5% from 5.6% last week, with the average rate on a 30-year mortgage now at its lowest level since October 10, 2023, when it was 6.32%. The recent pullback in mortgage rates has been encouraging to many prospective homebuyers and homeowners eager to refinance, with mortgage applications jumping to a three-year high last week.

Key Takeaways:

  • The average rate on a 30-year U.S. mortgage fell to 6.35% from 6.5% last week, reflecting a pullback in Treasury yields.
  • Borrowing costs on 15-year fixed-rate mortgages also declined, with the average rate slipping to 5.5% from 5.6% last week.
  • The average rate on a 30-year mortgage is now at its lowest level since October 10, 2023, when it was 6.32%.
  • Mortgage applications jumped to a three-year high last week, with applications for mortgage refinancing loans making up nearly 50% of all applications.
  • The recent pullback in mortgage rates has been encouraging to many prospective homebuyers and homeowners eager to refinance.
  • Mortgage rates are influenced by several factors, including the Federal Reserve's decisions, bond market investors' expectations for the economy and inflation, and the yield on 10-year Treasury notes.
  • Lenders use the yield on 10-year Treasurys as a guide to pricing home loans.

Statistics:

  • Average rate on a 30-year U.S. mortgage: 6.35% (down from 6.5% last week)
  • Average rate on a 15-year fixed-rate mortgage: 5.5% (down from 5.6% last week)
  • Average rate on a 30-year mortgage (one year ago): 6.2%
  • Average rate on a 15-year fixed-rate mortgage (one year ago): 5.27%
  • Mortgage applications: at a three-year high last week
  • Applications for mortgage refinancing loans: 49% of all applications last week
  • Yield on 10-year Treasury notes: 4% (as of Thursday afternoon)

Sources:

  • Freddie Mac (Thursday)
  • Mortgage Bankers Association (last week)
  • The Associated Press (2025)