Average rate on a 30-year mortgage edges higher after declining four
weeks in a row
[September 26, 2025] By
ALEX VEIGA
The average rate on a 30-year U.S. mortgage ticked up this week, ending
a four-week slide that brought down borrowing costs for homebuyers to
the lowest level in nearly a year.
The rate rose to 6.3% from 6.26% last week, mortgage buyer Freddie Mac
said Thursday. A year ago, the rate averaged 6.08%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners
refinancing their home loans, also edged higher. The average rate rose
to 5.49% from 5.41% last week. A year ago, it was 5.16%, Freddie Mac
said.
Mortgage rates are influenced by several factors, from the Federal
Reserve’s interest rate policy decisions to bond market investors’
expectations for the economy and inflation. They generally follow the
trajectory of the 10-year Treasury yield, which lenders use as a guide
to pricing home loans. The yield was at 4.19% in midday trading
Thursday, up from 4.16% late Wednesday.
Starting in late July, mortgage rates mostly declined in the lead-up to
the Federal Reserve’s widely anticipated decision last week to cut its
main interest rate for the first time in a year amid growing concern
over the U.S. job market.
But this week, Fed Chair Jerome Powell signaled a cautious approach to
future interest rate cuts, in sharp contrast with other members of the
Fed’s rate-setting committee, particularly those who were appointed by
President Donald Trump, who are pushing for faster cuts.
Treasury yields have since moved higher in the bond market as traders
pared bets for the number of upcoming cuts to rates by the Fed. That
helped push up mortgage rates.
The housing market has been in a slump since 2022, when mortgage rates
began climbing from historic lows. Sales of previously occupied U.S.
homes sank last year to their lowest level in nearly 30 years. And, so
far this year, sales are running below where they were at this time in
2024.
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Mortgage rates are displayed at a credit union in Wheeling, Ill.,
Tuesday, Sept. 23, 2025. (AP Photo/Nam Y. Huh)
 This week’s rise in rates could
signal a repeat of what happened about a year ago after the Fed cut
its benchmark rate for the first time in more than four years. Back
then, mortgage rates fell for several weeks prior to the when the
Fed cut rates at its September 2024 policy meeting. In the weeks
that followed, however, mortgage rates began rising again,
eventually reaching just above 7% in mid-January.
Like last year, the Fed’s rate cut doesn’t necessarily mean mortgage
rates will keep declining, even as the central bank signals more
cuts ahead.
Still, the late-summer decline in mortgage rates has already
encouraged many homeowners who bought in recent years after rates
climbed above 6% to refinance to a lower rate.
Home loan applications overall rose 0.6% last week from a week
earlier as mortgage rates fell, according to the Mortgage Bankers
Association. But applications for home refinance loans accounted for
more than 60% of all applications, MBA said.
“Even with this week’s uptick, mortgage rates remain near 11-month
lows, creating opportunities for both buyers and homeowners
considering a refinance,” said Hannah Jones, senior economic
research analyst at Realtor.com.
Mortgage rates will have to go well below 6% to make refinancing an
attractive option to a broader swath of homeowners, however. That's
because about 81% of U.S. homes have a mortgage with a rate of 6% or
lower, according to Realtor.com.
Economists generally expect the average rate on a 30-year mortgage
to remain near the mid-6% range this year.
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