Mortgage Rates for a 30-Year Loan Reach a Peak Not Seen in More Than a Year
Memorial Day occasioned a hiatus in Investopedia's daily mortgage rate news on Monday, May 26, 2025. regular coverage will resume on Tuesday, May 27.
Presently, the average 30-year mortgage rate has reached its highest point since May 2, 2024, escalating to 7.15%. Concurrently, rates for assorted mortgage types have also increased.
In light of such variability among lenders, it's prudent to research and compare different mortgage rates to find the most advantageous one, given your specific home loan requirements.
Today's New Purchase Mortgage Rate Averages
On Thursday, May 23, 2025, the average 30-year new purchase mortgage rate experienced a 4 basis points increase, landing at 7.15%. This marks the highest rate in over a year. In comparison, 30-year rates plunged historically in September 2024, sinking to a two-year low of 5.89%. At that time, the rate was over 1.2 percentage points cheaper than its current level. However, it's worth noting that the rate has significantly improved compared to late 2023, when it hit an estimated 23-year peak of 8.01%.
Meanwhile, the average rate for 15-year mortgages inched up by 2 basis points, reaching 6.13%. Despite this increase, it remains cheaper than the April 11, 2025 reading of 6.31%, which denoted the highest 15-year average in almost a year. Furthermore, it's almost a full percentage point below the historic 7.08% peak in October 2023, which stood as a 23-year high. September 2024 saw the 15-year rate decline to a two-year low of 4.97%.
The 6 basis points rise in Jumbo 30-year mortgage rates on May 23, 2025 lifted the average to 7.16%. This average is slightly above the 7.15% reading five weeks prior, marking a 10-month high. In contrast, last fall, jumbo 30-year rates plummeted to 6.24%, their lowest level in 19 months, while the estimated peak in October 2023 was the costliest jumbo 30-year average in over two decades.
The Weekly Freddie Mac Average
Each Thursday, Freddie Mac, a government-sponsored mortgage loan buyer, publishes a weekly average of 30-year mortgage rates. On May 20, 2025, this average rose another 5 basis points to 6.86%. Last September, the average fell as far as 6.08%, but in October 2023, it skyrocketed to a 23-year peak of 7.79%.
It is worth noting that the average calculated by Freddie Mac differs from our Investopedia 30-year average, as Freddie Mac computes a weekly average from the previous five days of rates. In contrast, our Investopedia 30-year average is a daily reading, offering a more precise and up-to-date indicator of rate movement. Additionally, the criteria for included loans, such as the amount of down payment and credit score, vary between Freddie Mac's methodology and our own.
Important Considerations
The mortgage rates published by Investopedia will not correspond directly to teaser rates found online, as these rates are strategically selected and may require paying points in advance or be based on an ultrahigh credit score or smaller-than-typical loans. Ultimately, the rate you will secure will depend on factors like your credit score, income, and more, and may differ from the averages presented here.
A monthly mortgage payment is influenced by factors like the home price, down payment, loan term, property taxes, homeowners insurance, and interest rate on the loan (which is heavily dependent on your credit score). Utilize the inputs below to gauge potential monthly mortgage payments.
What Causes Mortgage Rates to Rise or Fall?
Mortgage rates are determined by a complex interplay of macroeconomic and industry factors, namely:
- The level and trajectory of the bond market, particularly 10-year Treasury yields
- The Federal Reserve's current monetary policy, focusing on bond buying and funding government-backed mortgages
- Competition among mortgage lenders and between different loan types
Due to the simultaneous influence of these factors, it is usually difficult to pinpoint a specific cause for rate changes.
In 2021, macroeconomic factors largely kept mortgage rates relatively low. Notably, the Federal Reserve was purchasing billions of dollars in bonds to counteract the economic impact of the pandemic. The bond-buying policy played a crucial role in pushing mortgage rates down.
However, starting in November 2021, the Fed began tapering its bond purchases, causing reductions each month until reaching net zero in March 2022. Between that time and July 2023, the Fed aggressively increased the federal funds rate to combat sky-high inflation. Even though the fed funds rate does not directly affect mortgage rates, its speedy rise over the last two years has indirectly led to an upward impact on mortgage rates.
In September 2023, the Fed decided to reduce the federal funds rate by 0.50 percentage points. It then followed this with quarter-point reductions in November and December. At their March 19, 2025 meeting, the Fed opted to hold rates steady, and it is possible that they may not announce another rate cut for months.
How We Track Mortgage Rates
The national and state averages cited above are provided as-is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (a down payment of at least 20%) and an applicant with a credit score between 680 and 739. The resulting rates represent what borrowers can generally expect when requesting quotes from lenders based on their qualifications, which may differ from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.
As inflation slows and the Fed potentially decreases its benchmark rate, most forecasts anticipate a gradual decline in rates. However, economic policy and inflation uncertainty mean rates may remain elevated for some time. Ultimately, the Federal Reserve's monetary policy, combined with inflation, economic growth, and investor demand, exerts a significant influence on the cost of home financing in the U.S.
- For those interested in personal-finance and investing, it's crucial to monitor the changing mortgage rates as they influence the cost of home financing.
- To make an informed decision while personal-finance investing, considering different tokens such asICO could potentially generate returns while your personal-finance is tied up in a mortgage. This could help offset the increased mortgage expenses and ensure a more favorable financial position.
