Housing News

Mortgage Interest Rates Fall to Lowest Levels in 2025

Stubbornly high mortgage interest rates ticked down to their lowest levels of the year—just in time for the Spring homebuying season.

Rates averaged 6.87% for 30-year, fixed-rate mortgages in the week ending Feb. 13, according to the latest Freddie Mac data.

This was down from 6.89% in the previous week, but up from 6.77% around this time last year, according to Freddie Mac.

“Recent mortgage rate stability is benefitting potential buyers, as purchase demand is stronger than this time last year,” Freddie Mac’s Chief Economist Sam Khater said in a statement. “This is an indication that a thaw in buyer activity could be on the horizon.”

In more good news for buyers’ budgets, home prices have also dipped. Nationally, the median home list price was $400,500 in January, down 2.2% year-over-year, according to the most recent Realtor.com data.

Buyers also have more options to choose from. The number of active home listings was up 24.6% year-over-year in January, according to Realtor.com.

However, buyers may not want to hold out for mortgage rates to make any dramatic drops.

U.S. Federal Reserve Chair Jerome Powell told Congress this week the Fed was in no rush to continue cutting interest rates. While mortgage rates are separate from the Fed’s short-term interest rates, the two generally move in the same direction.

The Fed had raised interest rates to bring down inflation to its 2% target. Yet inflation has remained sticky. It inched up to 3% annually in January, according to the Consumer Price Index.

The economy also remains strong, giving the Fed less of an incentive to lower rates.

“Mortgage rates could be volatile in the weeks ahead, which could set us up for an unpredictable spring housing market,” said Lisa Sturtevant in a statement. She is the chief economist of Bright MLS, the multiple listing service covering the mid-Atlantic region. “There is significant pent-up demand in the market. However, potential headwinds include rising inflation and economic uncertainty.”