The average long-term mortgage rate in the United States has magically returned to 6.15%, the lowest level seen in all of 2025. That drop from 6.18% last week is an important marker, reflective of a recent and almost unprecedented change. Beginning in July, borrowing costs have been relaxing as expectations for Federal Reserve interest rate cuts have increased. This time a year ago, that same mortgage rate averaged 6.91%—highlighting just how much the market has changed since then.
Freddie Mac, which tracks mortgage rates, reported that the average rate on a 30-year mortgage has remained relatively stable since dropping to 6.17% on October 30. This stability is a sign that the market is stabilizing after some market volatility earlier this year. The newest data shows a significant drop in the effective borrowing cost on 15-year fixed-rate mortgages. It has fallen from 5.50% to 5.44%.
At midday on Wednesday, the yield on the 10-year Treasury was 4.14%, down a tick from last week’s 4.15%. In turn, Treasury yields play a major role in determining mortgage rates. These changes increase lenders’ costs and impact the price that lenders can offer to borrowers.
Nationally, economists expect the typical rate on a 30-year mortgage to stay barely above 6% over the next year. This positive outlook adds up to rates having recently reached a low point. In the short term, they are unlikely to drop much further.
Home listings are up dramatically compared to 2024. Sellers are having a hard time right now as homes sit longer on the market. As a result, more are choosing to lower their original list prices due to buyer cold feet and affordability pain.
Affordability is still the leading issue for would-be home buyers, especially first-time buyers, due to the ongoing financial challenges they encounter. Despite recent declines, mortgage rates are still well above their all-time lows. As a result, millions of would-be homebuyers are homeless.
