Pleas for lower mortgage rates could be the battle cry of the decade among aspiring homeowners and those looking to refinance — and for good reason. According to Freddie Mac, current interest rates for a 30-year fixed-rate mortgage hover around 6.8%. Rates for a 15-year fixed-rate mortgage are right around 6%. Those are more than double the sub-3% mortgage rates consumers saw during the pandemic era.
But if you’re waiting for rates to drop before buying a home, experts suggest otherwise. Current financial and housing market data indicate little interest rate relief in the coming year. Plus, there’s political turmoil to consider, including tariffs that could make building materials more expensive. If you want to buy, you’re not entirely out of luck, but it’s wise to consider a buying strategy that’s less about mortgage rates and more focused on homeownership.
Learn more: How to buy a house in 13 steps
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As of April 17 this year, Freddie Mac reported that rates for 30-year fixed-rate mortgages had stayed below 7% for 13 consecutive weeks. This time last year, mortgage rates were averaging 7.1%. But considering rates are inching back up near 7%, we get it if you feel like you can’t catch a break in the current economy.
In situations like these, it pays to look at the numbers. Here’s the Freddie Mac data on mortgage rates for the past 52 weeks as of April 17, 2025:
If you just go by the numbers, rates on both 30-year and 15-year fixed-rate mortgages remain below the highs noted above. So, yes, mortgage rates have decreased occasionally over the past year. Will they keep dipping? That remains to be seen.
If you’re looking for a significant interest rate drop in 2025, you’ll likely be left waiting. The latest news from the Federal Reserve and other key economic data point toward steady mortgage rates on par with what we see today.
When the Fed — the common nickname for the Federal Open Market Committee (FOMC) — last met in March 2025, it voted to keep the federal funds rate the same for the time being. However, the central bank predicted two rate cuts in 2025.
That federal funds rate tends to directly influence rates on shorter-term lending. While mortgage rates aren’t directly based on the fed funds rate, they typically mirror fed fund rate trends. So, if the fed funds rate goes up, mortgage rates will likely follow. The inverse is also true.
The next Fed meeting is set for May 6 and 7.
Learn more: How the Fed rate decision impacts mortgage rates
While short-term lending rates closely follow the fed funds rate, mortgage rates more closely follow the 10-year Treasury yield. As of April 17, the 10-year Treasury yield sat at 4.34%, down from 4.59% the year prior.
You’re probably wondering why today’s mortgage rates aren’t in the 4% range, right?
To determine current mortgage rates, lenders add a “spread” to the 10-year Treasury yield. The spread is simply the difference between the rates consumers pay and the rate on the 10-year Treasury. Without getting too much into the weeds, charging a spread helps mortgage lenders cover costs associated with making loans to the public and the risk of providing such loans.
Now, let’s go back to mortgage rates. On April 17, 2024, the average 30-year fixed mortgage rate was 7.1%, and the 10-year Treasury yield was 4.59% — a spread of 2.51%. Today, the average 30-year fixed mortgage rate is 6.83%, and the 10-year Treasury yield is 4.34% — a spread of 2.49%. Spreads, therefore, have held relatively steady. And as Treasury yields have declined, so have mortgage rates.
In short, no. You probably shouldn’t wait to buy a home until mortgage rates drop. Mortgage rates are just one part of the affordability equation. You also have to consider home prices, a factor of housing supply and demand.
The current housing market is in a crunch. To put it simply, buyers outnumber homes for sale, especially homes in price ranges accessible to the first-time home buyer. When supply and demand are out of balance like this, home prices tend to remain high since sellers know they’ll have multiple buyers interested.
According to data from the Federal Reserve Bank of St. Louis, the median sale price of single-family homes has consistently trended upward since the first quarter of 2009. At that time, the median sale price was $208,400. As of the fourth quarter of 2024 (the most recent data at the time of publishing), the median price has risen to $419,200.
While recession chatter has recently increased, prospective buyers likely won’t see much relief in a true recession. If interest rates drop like they tend to do in recessions, that will increase the number of people looking to buy so they can lock in a lower interest rate. That drives up demand for the already limited supply of homes. To truly save, buyers need both interest rates and home prices to drop — an unlikely scenario.
Keep reading: Should you lock in a mortgage rate in today’s housing market — and if so, when?
If you crave the comforts of homeownership, the best strategy in today’s market may be to buy what you can afford. Whether that means a smaller house or a condo instead of a single-family home, owning something puts you in a position to start building equity.
Yes, shopping for the best mortgage lenders with low rates and fees is crucial when getting a mortgage. But to help you find your ideal home that balances affordability and desirability, it pays to adopt a curious mindset and consider lesser-discussed financial tools.
There’s no better time to learn more about your local real estate market than today. By adopting a sense of curiosity, you could discover that your city has more to offer housing-wise than you previously thought.
You may want to take weekend excursions to lesser-known neighborhoods and suburban developments beyond the city limits. You never know what you’ll find that could expand your idea of what “home” looks like — including new developments, school districts, and types of homes.
If you’re looking to spend less on a home in today’s mortgage market, a house needing a bit of TLC could help you do just that. Loans like the FHA 203(k) mortgage can roll your purchase and renovation costs into one convenient loan. When you qualify and have an accepted offer, your lender immediately funds the home’s purchase price and puts the cost of renovations into an escrow account. As you make repairs, funds get dispersed.
How would it feel to have a longer commute yet come home to a house you love? Master-planned communities tend to crop up outside major cities, offering amenities like parks, shopping, and top-notch schools — all in exchange for a longer commute. These areas could look a lot more palatable if they offer commuting options like park-and-ride or commuter rail. Dare to consider parking the car and taking public transit if it could get you into the home of your dreams.
While shared walls, floors, and ceilings might not immediately scream “dream home,” they could help you find an affordable home in a terrific area. Condominiums come in various shapes and sizes, from apartment-style flats to townhomes. Depending on the area, you might even score a small backyard. However, be sure to consider HOA fees when calculating your monthly payment.
While the monthly payment on a 15-year mortgage will be higher than the typical 30-year, these loans have plenty of upsides. Not only will you pay off your home on a speedier timeline, but you’ll also likely score a lower interest rate and save a ton on interest over the life of your loan.
To make today’s mortgage rates more palatable, look into rate buydown options. An interest rate buydown lets you pay cash up front in exchange for a reduced interest rate on your mortgage. Buydowns can be permanent or temporary (for your loan’s first one to three years, for example). Even a few years of lower rate relief can make today’s home prices more affordable.
Economists expect mortgage rates to hold steady for the remainder of this year. According to Freddie Mac data, the interest rate on a 30-year fixed-rate mortgage has ranged from 6.62% to 7.04% so far in 2025.
Compared to historical mortgage rates, 7% isn’t considered a high rate. While it might be high compared to pandemic-era rates that were sub-3%, it’s on par with mortgage rates in the 1990s, and considerably lower than the double-digit rates seen in the late 1970s and early 1980s.
It’s not impossible to get a 3% interest rate, but doing so requires the perfect set of circumstances. You’d need to find a homeowner with an assumable mortgage — one that can be passed to a new owner at the same interest rate as the original loan. Assumable mortgages are generally government-backed loans from agencies like the VA, FHA, or USDA.
Laura Grace Tarpley edited this article.