30-Year Mortgage Rates Dip Slightly, Remaining Near 6.9%

Mortgage rates witnessed a slight decline this week amid market volatility for bonds, hovering close to 6.9%. According to Freddie Mac data, the average 30-year mortgage rate fell two basis points to 6.87% as of Wednesday, down from 6.89% the previous week. In contrast, the 15-year mortgage rate rose slightly from 6.05% to 6.09%.

Despite reaching 6.87%, the lowest level recorded so far in 2025, mortgage rates have remained within a narrow range since hitting a year-to-date high of 7.04% in mid-January. Experts anticipate that rates will continue to fluctuate as financial markets respond to shifting priorities from the presidential administration and economic data.

On Wednesday, the Consumer Price Index data revealed rising inflation in January, above the Federal Reserve's target of 2%. This dampened expectations of lower interest rates. Ten-year Treasury yields, which closely track mortgage rates, initially surged, prompting traders to reassess the Fed's interest rate path. In December, traders anticipated two cuts in 2025, but now predict only one, potentially in December.

However, yields fell sharply the following day after President Trump proposed reciprocal tariffs on US imports, although implementation was delayed.

Although mortgage rates are not directly controlled by the Fed, they tend to align with expectations of benchmark interest rate adjustments.

"Mortgage rates are unlikely to decline significantly in the near future," said Joel Berner, senior economist at Realtor.com. "Debt market investors are demanding higher returns due to diminished spending power, and the Federal Reserve is unlikely to reduce interest rates."

"The era of sub-4% mortgage rates is behind us," Berner added. "If inflation persists, they may not return for a significant period."

Mortgage applications for home purchases remained low last week due to near-7% rates, as reported by the Mortgage Bankers Association. Purchase applications decreased by 2% compared to the previous week, while refinancings increased.

Disclaimer: This content is provided for informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor for personalized guidance.