Mortgage rates remain stable heading into mid-July 2025, with affordability still top of mind for many buyers.
As of Thursday, July 10, 2025, the average 30-year fixed mortgage rate stands at 6.625%, holding steady from earlier this week, according to Zillow Home Loans. The 15-year fixed rate sits at 5.75%, while adjustable rates, such as the 7-year ARM, average 7.375%. Despite expectations of gradual economic improvement, high borrowing costs continue to shape buyer behavior and influence overall market activity.
Current mortgage rates snapshot
Here’s how today’s most common loan types compare:
- 30-year fixed: 6.625% (APR: 6.782%)
- 30-year VA: 6.625% (APR: 6.782%)
- 20-year fixed: 6.5% (APR: 6.733%)
- 15-year fixed: 5.75% (APR: 6.042%)
- 7-year ARM: 7.375% (variable rate)
Rates include points, typically 1.6–1.85, depending on loan type and lender policies.
Rate trends and market outlook
Mortgage rates have hovered between 6% and 7% for much of 2025. Analysts expect this range to persist through the end of the year unless a significant economic shift or recession triggers faster policy changes by the Federal Reserve.
- The Fed has signaled no major cuts until inflation falls closer to 2.0%, a goal unlikely before 2027.
- Short-term rates may begin to decline in late 2025 or early 2026, which could gradually bring down mortgage rates in 2026 and beyond.
- Lock-in effect remains strong: Over 75% of current homeowners hold rates below 6%, discouraging listings and reducing housing supply.
How to qualify for the best mortgage rate
Lenders evaluate a borrower’s financial profile when setting rates. To improve your chances of securing a lower interest rate:
- Increase your credit score: A score of 740+ often qualifies for the lowest advertised rates.
- Make a larger down payment: More upfront cash reduces lender risk.
- Lower your debt-to-income ratio (DTI): Keeping your DTI below 36% is a strong indicator of creditworthiness.
- Shop multiple lenders: Rate offers can vary significantly between banks and mortgage brokers.
Zillow’s BuyAbility tool can also help borrowers estimate personalized rates based on income, location, and credit factors.
Should you buy or wait?
While elevated rates continue to dampen affordability, home prices in many regions have slowed or plateaued. According to U.S. News & World Report, the housing market is entering a new phase of stability, with modest growth in home sales expected through 2030.
Why now might still make sense:
- Inventory is increasing as more homeowners adjust to higher rate norms.
- New home incentives like mortgage buy-downs and closing cost contributions are still available.
- Rent remains high, with the average single-family rental priced at $2,296/month—over 40% cheaper than the estimated $4,000/month total cost of homeownership, yet without the long-term equity benefits.
What to watch next
- Fed decisions on short-term interest rates
- Housing supply shifts as the lock-in effect declines
- Builder activity and home price fluctuations by region
- Insurance, maintenance, and property tax trends affecting total cost of ownership