As of Wednesday, March 12, 2025, the average mortgage rates remain stable, with the 30-year benchmark staying below 6.7%. Today’s focus is on the consumer price index release, expected to give insights into whether inflation is moving closer to the Federal Reserve’s 2% target. Economists anticipate February’s inflation data to show a rate of 2.9%, slightly lower than January’s 3%. There is ongoing uncertainty surrounding economic conditions, including the impact of tariffs imposed by the Trump administration on Canada, China, and Mexico, as well as persistent inflation pressures that could raise borrowing costs, particularly for large loans like mortgages. For potential homebuyers entering the spring market, this could be an opportune time to start exploring mortgage options.
Presently, the average interest rates for a 30-year fixed mortgage stand at 6.68% for both purchase and refinance, showing a slight decrease from the previous week. Rates for a 15-year fixed mortgage are at 5.97% for purchase and 5.98% for refinance, also experiencing a slight decline compared to the previous week. Jumbo mortgages are carrying an average rate of 6.69%.
It’s important to note that mortgage rates are influenced by various factors such as inflation, economic indicators, housing market trends, and the Federal Reserve’s monetary policy. Lenders also consider individual factors like credit score, down payment amount, the property being financed, and loan terms (such as 30-year or 15-year options) when determining rates.
Given the daily fluctuation in rates, securing a mortgage rate is advisable once you are satisfied with the terms and conditions of your loan. For more detailed information on mortgage shopping tips and insights, refer to our comprehensive guide for informed homebuyers in 2025.
Freddie Mac’s recent weekly mortgage report indicates a decline in rates, with the average 30-year fixed-rate mortgage dropping to 6.63% and the 15-year fixed-rate mortgage falling to 5.79%. This marks a decrease from rates a year ago, offering potential homebuyers increased purchasing power and presenting refinancing opportunities for existing homeowners.
In summary, the current mortgage landscape is favorable for buyers and homeowners alike, with declining rates creating a conducive environment for real estate transactions.
This week, the market saw a significant rise in mortgage applications, reaching nearly 44%, marking the highest level since mid-December. Every Thursday at noon ET, Freddie Mac provides updates on its Prime Mortgage Market Survey data.
Here are four key factors that can influence your mortgage rate:
1. : Your credit score plays a crucial role in determining the mortgage rates you can access. Borrowers with good to excellent credit scores, typically above 670, are more likely to secure the best rates. However, even with fair credit, you may still find lenders offering decent rates.
2. **Down Payment**: Increasing the amount you put down as a down payment can positively impact your interest rate. Paying at least 20% of the home’s purchase price upfront usually results in a lower interest rate and can help you avoid additional costs like mortgage insurance.
3. **Loan Term**: While 30-year mortgages are popular, shorter loan terms like 20, 15, or 10 years can offer lower interest rates but may come with higher monthly payments. Longer terms may have lower monthly payments but result in higher total interest paid over the loan’s life.
4. **Interest Rate Type**: Mortgages can have fixed or variable rates. Fixed-rate mortgages provide a consistent interest rate throughout the loan term, whereas adjustable-rate mortgages (ARMs) start with a fixed rate that later adjusts based on market conditions. Choosing the right type depends on your financial goals and risk tolerance.
Understanding the difference between prequalification and preapproval is essential. Prequalification offers a basic estimate of what you can borrow, while preapproval involves a more thorough financial assessment to determine the exact loan amount a lender is willing to provide.
Stay informed about changes in mortgage rates, as they can significantly impact your financial decisions. Mortgage rates are influenced by the benchmark federal funds target interest rate set by the Federal Reserve, with factors like inflation affecting rate adjustments.
Keeping track of market trends and understanding how various factors influence mortgage rates is essential for making informed decisions in your homebuying journey.
Between March 2022 and July 2023, the Federal Reserve took decisive action to combat soaring inflation rates following the pandemic. This included a half-point reduction in the federal funds target interest rate on September 18, followed by two quarter-point cuts in November and December. Fast forward to January 29, 2025, the Fed opted to maintain benchmark rates at 4.25% to 4.50%, marking a pause after previous consecutive cuts aimed at stabilizing inflation at around 2%. Looking ahead, the Fed is expected to carefully monitor economic data and risks to inform future adjustments. Despite initial projections of four more cuts in 2025, uncertainty lingers due to potential impacts of a new administration. The upcoming policy meeting on March 18–19, 2025 is anticipated to see rates unchanged, with a strong likelihood of the Fed maintaining the current range. Market watchers are closely tracking inflation and labor reports, with recent data showing a moderation in inflation rates since their peak in mid-2022. All eyes are on the latest economic indicators to gauge the economy’s trajectory and potential implications for future Fed decisions.
Federal Reserve Chair Jerome Powell expressed confidence in the US economy during a policy forum at the University of Chicago on March 7, stating that there is no rush to adjust interest rates and that the central bank is well-equipped to wait for more clarity on policy changes by the Trump administration. The rate-setting panel led by Powell will announce its decision later in the year, at the conclusion of its meeting on Wednesday, March 19, 2025, at 2 p.m. ET.
In other news, a $418 million antitrust settlement with the National Association of Realtors was granted preliminary approval by a judge on April 23, 2024. This settlement marks the end of traditional real estate broker commissions of up to 6% of a home’s purchase price, with real estate agents now required to provide interested buyers with a representation agreement before touring a home, effective August 17, 2024. While this settlement is not expected to impact mortgage rates, it empowers consumers to negotiate agent fees and potentially save money in the long term.
For more information on mortgage rates, refinancing, and homebuyer assistance programs, explore our comprehensive guides and resources to make informed decisions that align with your budget and financial goals.
An adjustable-rate mortgage (ARM) is a type of home loan with a variable interest rate. Unlike a fixed-rate mortgage that maintains a constant rate and payments for the entire loan term, an ARM starts with an initial fixed rate for a period, usually three years or more, before adjusting to a higher rate and further adjusting periodically for the rest of the loan’s life. For example, a 5/1 ARM signifies a fixed rate for five years before adjusting annually. Find out how to switch from an ARM to a fixed-rate mortgage in our refinancing guide.
Can you negotiate your mortgage rate? While it’s unlikely, lenders base rates on market conditions and financial factors. However, you can inquire about alternative ways to reduce costs when comparing lenders. Some may offer lower rates if you pay “mortgage points” upfront, with each point potentially reducing your interest rate by 0.25%. Learn more about securing the best rate for your next mortgage in our guide.
What happens to your mortgage after you pass away? Unlike other debts settled through your estate, mortgages are not typically transferable. This means the property must be fully paid off to transfer the title. Only those who are on the loan are responsible for the mortgage debt. Discover more about mortgage implications after death.
If you already own a home, can you borrow against its equity for significant or unexpected expenses? Yes, leveraging your home’s value can fund renovations, debt consolidation, or emergencies without refinancing or risking your current mortgage rate. Good credit and sufficient home equity are usually required. Learn about accessing your home’s equity while rates are favorable.
Editor’s note: Rates are accurate as of Wednesday, March 12, 2025, at 6:15 a.m. ET. Rates and offers may vary by region and are subject to change.
Sources:
– Mortgage Industry Insights, Bankrate. Accessed March 12, 2025.
– Primary Mortgage Market Survey, Freddie Mac. Accessed March 7, 2025.
– Employment Situation Summary, U.S. Bureau of Labor and Statistics. Accessed March 10, 2025.
– Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed February 13, 2025.
– Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed February 14, 2025.
– CME FedWatch Tool, CME Group. Accessed March 12, 2025.
