Average mortgage rates have been decreasing week over week as of Monday, March 10, 2025, with the 30-year benchmark dropping by almost 30 basis points since the beginning of the year. The market is eagerly anticipating key inflation data this week, starting with the consumer price index on Wednesday and followed by the producer price index on Thursday. The forthcoming data from these reports will offer further insights into the state of the economy following last week’s positive jobs report, which revealed an addition of over 151,000 roles by employers to payrolls in February, while unemployment increased slightly to 4.1%. These upcoming readings are expected to impact the Federal Reserve’s rate decision during its meeting next week, with traders predicting a 97% likelihood that the Fed will maintain the rate at 4.25% to 4.50%, according to CME FedWatch. While the Fed does not directly control mortgage rates, lenders closely monitor the Fed rate due to its response to many of the same economic factors that can influence borrowing rates, especially for significant loans like mortgages. With the spring homebuying season picking up steam, now could be an opportune time to explore mortgage options if you are in the market for a new home. The current average rate for a 30-year fixed mortgage stands at 6.67% for purchase and 6.66% for refinance, representing a decrease of 9 basis points from the previous week’s rates. Rates for a 15-year mortgage are averaging at 5.95% for purchase and 5.93% for refinance, down by 10 basis points and 14 basis points, respectively, from the previous week. Additionally, the average purchase rate for a 30-year fixed jumbo mortgage is at 6.72%. Mortgage rates are influenced by various factors such as inflation rates, economic conditions, housing market trends, and the Federal Reserve’s target interest rate. Lenders also take into account your credit score, down payment amount, the property being considered, and other loan terms when determining the interest rates offered for mortgages. Since rates can change daily, it is advisable to lock in a mortgage rate when you are satisfied with the overall terms of your loan.
“The start of the home buying season has brought a significant drop in the 30-year fixed-rate mortgage, marking the largest weekly decline since mid-September,” stated Sam Khater, chief economist at Freddie Mac, discussing the latest data. This decrease in rates is empowering potential homebuyers by boosting their purchasing power and incentivizing action. It also presents an opportunity for existing homeowners to refinance, with the refinance share of market mortgage applications hitting nearly 44%, the highest since mid-December.
Freddie Mac releases its Prime Mortgage Market Survey data weekly on Thursdays at noon ET. Here are four key factors that influence your mortgage rate:
1. Your credit score: Lenders typically offer the best rates to borrowers with good to excellent credit scores, usually starting at a FICO score of 670. Knowing your credit score can help you find lenders likely to approve you and determine the mortgage that suits your financial situation.
2. Your down payment: Putting down more money upfront can lead to a lower interest rate and help you avoid mortgage insurance. Paying at least 20% of the home’s purchase price upfront is usually beneficial.
3. Your loan term: While the 30-year mortgage is common, shorter terms like 20 years, 15 years, and 10 years often come with lower interest rates but higher monthly payments. Longer terms might have lower monthly payments but higher total interest costs.
4. Interest rate type: Mortgage rates can be fixed or variable. Fixed rates remain stable throughout the loan term, while adjustable-rate mortgages (ARMs) start with a fixed rate that later adjusts based on market conditions.
Understanding prequalification and preapproval is crucial in determining your home affordability. Prequalification provides a basic estimate based on preliminary information, while preapproval involves a more in-depth evaluation of your financial situation to offer a reliable loan amount.
Stay informed about how changes in mortgage rates can impact your financial decisions. Mortgage lenders closely monitor the benchmark federal funds target interest rate set by the Federal Reserve, known as the Fed rate, which influences rates on various financial products.
When the federal funds rate rises, so do the Annual Percentage Yields (APYs) on savings products such as CDs, high-yield savings accounts, money market accounts, and home equity loans. While mortgage rates do not closely track the Fed rate, they are influenced by factors considered by the Federal Reserve, especially inflation. As the Fed rate goes up, mortgage rates also tend to increase.
Between March 2022 and July 2023, the Federal Reserve raised the target interest rate 11 times to combat high inflation following the pandemic. Anticipated rate cuts of half a point in September 18, followed by quarter-point cuts in November and December were announced. In January 29, 2025, the Fed held benchmark rates steady, citing efforts to manage inflation and stable labor market conditions.
Looking ahead to the next Federal Reserve policy meeting on March 18–19, 2025, it is widely anticipated that the Fed will maintain the interest rate range at 4.25% to 4.50%. Analysts are closely monitoring inflation and labor reports for insights into potential future rate adjustments. Recent job data showed a slight increase in unemployment and a mixed performance in job creation, while inflation remains a key concern for the economy. All eyes are on upcoming inflation readings to gauge the economy’s health.
The inflation rate increased to 2.9% in the latest report, marking the highest rate since June 2024. The producer price index, released on February 13, also showed a price acceleration, with prices paid by producers for goods and services rising 0.4% from the previous month and 3.5% for the 12 months ending in January. This persistent inflation trend may lead the Federal Reserve to hold off on further interest rate cuts until later in the year.
Federal Reserve Chair Jerome Powell stated at a University of Chicago policy forum on March 7 that despite uncertainties, the US economy remains strong. Powell emphasized the need for patience and clarity before making any significant policy changes in response to the Trump administration’s actions.
The Federal Reserve’s rate-setting panel, led by Powell, is scheduled to announce its rate decision on Wednesday, March 19, 2025, at 2 p.m. ET. Stay informed about the upcoming Federal Reserve meeting and how it could impact your finances.
In other news, on April 23, 2024, a judge approved a $418 million antitrust settlement with the National Association of Realtors, ending traditional real estate broker commissions of up to 6% of a home’s purchase price. Starting August 17, 2024, real estate agents are required to provide interested buyers with a representation agreement before showing homes. This agreement aims to bring transparency to the buyer-agent relationship and fee structure, allowing consumers to negotiate agent fees and potentially save money in the long term.
Explore our homebuying series for more information on mortgages, refinancing, and navigating the real estate market. Learn about mortgage rates, rate locks, and how to qualify for homebuyer assistance programs. Our personal finance guides can help you make sound financial decisions to save and grow your wealth.
The Department of Housing and Urban Development (HUD) defines a first-time homebuyer as someone who, along with their spouse, has not owned a principal residence in the past three years. Explore potential programs available to you, even if you have previously owned a home, in our homebuyer assistance guide.
What is an adjustable-rate mortgage (ARM)? An ARM is a type of home loan with a variable interest rate. Unlike a fixed-rate mortgage that maintains a constant interest rate for the entire loan term, an ARM starts with an initial fixed rate for a specified period (usually three years or longer), then adjusts to a higher rate and fluctuates periodically throughout the loan’s duration.
For example, a 5/1 ARM indicates a fixed rate for the first five years before adjusting annually. Discover how to convert your ARM to a fixed-rate mortgage in our refinancing guide.
Can you negotiate your mortgage rate? While negotiating the rate directly may be challenging, you can inquire about alternative cost-saving methods when comparing lenders. Some lenders offer reduced rates in exchange for “mortgage points,” which are upfront fees paid to the lender. Each point typically costs 1% of the mortgage amount and can lower your interest rate by around 0.25%. Learn more about securing the best rate for your next mortgage in our guide.
What happens to your mortgage after your passing? Unlike other debts settled through your estate, mortgages are not typically transferable. This means that the property title must be paid off entirely before transferring ownership. Only individuals listed on the loan agreement are responsible for the mortgage. Learn more about post-mortem mortgage considerations.
Already a homeowner? You can leverage your home’s equity to finance significant expenses like home improvements, debt repayment, or emergencies. Accessing your home’s equity allows you to benefit from lower rates without refinancing your existing mortgage. Good to excellent credit and sufficient home equity are usually required. Find out how to tap into your home’s equity as interest rates decline.
Editor’s Note: Rates mentioned are accurate as of Monday, March 10, 2025, at 6:15 a.m. ET. Please note that APYs and promotional rates may vary by region and are subject to change.
Sources:
– Mortgage Industry Insights, Bankrate. Retrieved on March 10, 2025.
– Economic, Housing and Mortgage Market Outlook – January 2025, Freddie Mac. Retrieved on January 30, 2025.
– Primary Mortgage Market Survey, Freddie Mac. Retrieved on March 7, 2025.
– Employment Situation Summary, U.S. Bureau of Labor Statistics. Retrieved on March 10, 2025.
– Consumer Price Index Summary, U.S. Bureau of Labor Statistics. Retrieved on February 13, 2025.
– Producer Price Index News Release Summary, U.S. Bureau of Labor Statistics. Retrieved on February 14, 2025.
– CME FedWatch Tool, CME Group. Retrieved on March 10
