Good News for Homebuyers: Mortgage Rates Drop in Late 2025

The average rate for a 30-year fixed mortgage has fallen to 6.15%, down from 6.18% the previous week. This marks a significant decrease from the start of the year when rates were around 7%.

Good News for Homebuyers

Lower mortgage rates mean borrowing costs are reduced, making homes more affordable. This is crucial as housing affordability has been a major economic concern.

Factors Behind the Drop

The decline in mortgage rates is not directly linked to the Federal Reserve's interest rate decisions. Instead, it follows the 10-year Treasury yield, which was around 4.14% on Wednesday.

Housing Market on the Rise

• Home sales increased by 3.3% in November, with gains in all U.S. regions.
• The National Association of Realtors reports a positive trend in the housing market.

Economic Growth and Inflation

• The economy grew at an annualized rate of 4.3% in Q3 2025, higher than expected.
• Inflation is easing, with the consumer price index rising by just 0.2% in November.

Job Market Concerns

• Employers added 64,000 jobs in November.
• The unemployment rate ticked up to 4.6%.

Federal Reserve's Rate Cut

The Federal Reserve cut rates by 25 basis points for the third straight time in December, citing a slowing labor market and elevated inflation.