Mortgage Interest Rates

Average mortgage rates were flat in June 2025, according to Freddie Mac. The average 30-year fixed-rate mortgage held at 6.82%, while the 15-year stayed at 5.95%. Compared to a year ago, the 30-year rate is down 10 basis points (bps), and the 15-year rate is 24 bps lower.

Why are Interest Rates Continuing to Rise?

The 10-year Treasury yield, a benchmark for long-term borrowing, averaged 4.43% in June – a marginal increase of 5 bps from the previous month.  

However, the primary reason interest rates have remained elevated pertains largely to the uncertainty surrounding tariffs. There also continues to be growing concerns over budget deficits.

When Will Interest Rates Decline?

During Federal Reserve Chair Jerome Powell’s congressional testimony in June 2025, he noted the possibility of a rate cut being “sooner rather than later” if inflation remains contained. Nonetheless, he reiterated the Fed’s “wait and see” stance, citing ongoing uncertainty around how changes in trade, immigration, fiscal, and regulatory policies will affect the economy.

In June, the Federal Open Market Committee continued its pause on rate cuts, keeping the federal funds rate unchanged at 4.25% to 4.5%. Signs indicate a cumulative rate cut of 50 bps by the end of 2025.  

Faced with record-high prices for homes and stubbornly high interest rates, many would-be buyers will continue to stay on the sidelines until housing affordability conditions improve.