Mortgage rates are holding steady on Thursday, offering a glimmer of stability for potential homebuyers. However, new data reveals a growing sense of uncertainty is gripping the market, as high home prices and economic questions keep many would-be buyers on the sidelines despite rates lingering at 10-month lows.
As of August 21, 2025, the average interest rate for a conventional 30-year fixed mortgage remains at 6.500%. Meanwhile, the 15-year fixed rate sits at 5.625%, continuing a trend that offers little movement to start the day.
Today’s Mortgage Rates: A Snapshot (August 21, 2025)
Here are the current average mortgage rates for popular loan types:
- 30-Year Fixed-Rate: 6.500% (APR 6.647%)
- 15-Year Fixed-Rate: 5.625% (APR 5.921%)
- 20-Year Fixed-Rate: 6.375% (APR 6.626%)
- 30-Year FHA: 6.000% (APR 6.702%)
- 30-Year VA: 6.125% (APR 6.427%)
- 7-Year ARM: 7.000%
These rates, while significantly lower than last year’s peaks, are failing to ignite the housing market as affordability remains a major obstacle.
Why Aren’t Buyers Biting at 10-Month Lows?
While mortgage rates have seen a “substantial improvement” from their highs, the housing affordability crisis continues to deepen. The primary culprits are stubbornly high home prices and a persistent lack of housing inventory.
According to Lawrence Yun, chief economist for the National Association of Realtors (NAR), this undersupply is “holding back first-time home buyers from entering the market.”
Recent data paints a stark picture of this challenge:
- The median age of a first-time homebuyer has reached an all-time high of 38 years old.
- First-time buyers now make up just 24% of the market, the lowest share on record, according to NAR.
A new study from Bank of America highlights the widespread hesitation, finding that 60% of prospective buyers are unsure if now is the right time to purchase a home—a three-year high for market uncertainty.
The “Housing Lock-In” Effect and The Fed’s Shadow
Many potential buyers are waiting for rates to fall further before making a move. A Bankrate report found that about a third of buyers would need rates to drop below 6% to feel comfortable buying this year. Shockingly, 51% of those polled said they wouldn’t buy in 2025 at any mortgage rate, a significant jump from last year.
This reluctance is compounded by uncertainty surrounding the Federal Reserve’s next move. While many hope for a rate cut at the Fed’s September meeting, experts caution that this won’t automatically translate to lower mortgage rates.
Mortgage rates are more directly influenced by the yield on the 10-year Treasury note, which can move independently of the Fed’s benchmark rate. This leaves many buyers and existing homeowners in a state of paralysis, unwilling to sell and give up their ultra-low rates, further restricting supply.
What Should Homebuyers Do Now?
For those determined to buy in today’s market, experts recommend focusing on the factors you can control.
- Boost Your Credit Score: A higher score demonstrates you are a reliable borrower and is the most effective way to qualify for a lower interest rate.
- Increase Your Down Payment: A larger down payment reduces the risk for lenders, which can lead to better loan terms and a lower rate.
- Lower Your Debt-to-Income (DTI) Ratio: Paying down existing debts shows lenders you can comfortably manage a new mortgage payment.
Ultimately, shopping around with multiple lenders and getting a personalized rate based on your unique financial situation is more critical than ever.