Mortgage Rates Drop Slightly in June 2025, Offering Hope to First-Time Homebuyers Amidst Rising Home Prices
- Author: Margaret Hills
- Posted: 2025-06-09
Mortgage rates have dropped a little, with the 30-year fixed rate now at 6.85%, down from 6.89% just last week. This change is a welcome bit of relief because the cost of buying a house has been really high and the economy hasn't been doing too well.
Freddie Mac, a company that tracks mortgage rates, says that this fall in mortgage rates mirrors what's going on in the rest of the financial markets, especially with the government's 10-year loans, which change with the economy.
Even though the rates have come down a bit, they're still a lot higher than they were during the COVID-19 pandemic when people could borrow money for less than 3%.
The price to buy a house is one of the biggest concerns for many people right now. The National Association of Realtors reported that the median price of a home sold in April reached a new high of $414,000.
The housing market is seeing some more homes available for sale, but there aren't many more people buying homes. This suggests that the cost of homes is keeping people from purchasing.
Lawrence Yun, an economist at the National Association of Realtors, has pointed out that to increase home sales, we need lower mortgage rates. He notes that even with more homes for sale, there hasn't been a big increase in sales.
More than just mortgage rates are making things tough for homebuyers. President Trump had put extra taxes on some goods coming from other countries, which has made it harder and more expensive to build new homes, causing prices to go up.
Looking ahead, there are different opinions about where mortgage rates will go for the rest of 2025. Some experts think the 30-year mortgage rate might drop to 6.73% by the end of the year, and then to 6.33% in 2026.
Others, like Fannie Mae, think the rates might go down to 6.2% by the end of 2025 and to 6.0% by 2026. Odeta Kushi, an economist, says it's hard to predict exactly, but rates around 6% could happen if the economy's conditions are right.
For people thinking about buying a home now, experts suggest looking at the big picture, not just the mortgage rates. There's less competition to buy homes right now, so buyers might be able to negotiate better deals than they could during the super busy period of 2021-2022.
Some experts even say if you're ready and can afford it, you might want to buy now because home prices could keep going up. If you buy a house now and the mortgage rates go down later, you could still choose to refinance your home to take advantage of the lower rates.
In deciding when to buy a house, it's essential to think about how long you plan to live there, your budget, and how much risk you can handle. Jeff Taylor from the Mortgage Bankers Association points out that it's not just about trying to guess when interest rates will be lowest.
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