The average rates for purchasing and refinancing are on the rise as of Monday, June 9, 2025, with the 30-year fixed benchmark edging closer to 7%. Following a robust jobs report from last Friday, which showed an addition of 139,000 jobs in May and maintained the unemployment rate at 4.2%, attention is now shifting to critical inflation reports scheduled for this week. Of particular interest is Wednesday’s consumer price index, a key metric for inflation, followed by wholesale inflation data.
While the upcoming inflation reports and the Federal Reserve’s policy meeting later this month are unlikely to have an immediate impact on rates, market analysts are predicting a more than 95% chance that the central bank will maintain the Fed rate on June 18, according to CME FedWatch. If you’re considering entering the housing market this summer, it’s advisable to begin exploring mortgage lenders now. Seek quotes for conventional, FHA, VA, and other types of home loans, and get prequalified or preapproved to understand your purchasing power.
As of the latest data from Bankrate, the average rate for a 30-year fixed mortgage is 6.87% for purchasing and 6.94% for refinancing. Rates on a 15-year mortgage average 6.09% for purchasing and 6.23% for refinancing. The average purchase rate for a 30-year fixed jumbo mortgage is 6.89%.
Mortgage rates are influenced by various factors, including inflation rates, economic conditions, housing market trends, and the Federal Reserve’s target interest rate. Lenders also consider personal credit scores, down payment amounts, property details, and other loan terms when evaluating mortgage applications. Since rates can change daily, it’s advisable to lock in a rate when you’re satisfied with the overall terms and conditions of your mortgage.
Freddie Mac’s weekly mortgage report indicates an average rate of 6.85% for a 30-year fixed-rate mortgage, down 4 basis points from the previous week. The rate for a 15-year mortgage stands at 5.99%, also a decrease of 4 basis points from the previous week. These figures are lower compared to rates from a year ago.
“The average mortgage rate has decreased this week,” notes Sam Khater, Freddie Mac’s chief economist, “which is positive news for potential homebuyers, especially as housing inventory improves and house price growth slows down.”
The Time Mortgage Market Survey releases data weekly on Thursdays at noon Eastern Time. Four key factors influence your mortgage rate. Having just a half percentage point difference in your interest rate can lead to significant savings monthly and over the life of your mortgage. However, the rate you receive is based on the specific mortgage product you’re interested in, the upfront payments you’re willing to make, and your overall financial well-being.
1. Your credit score: Being aware of your credit score helps you identify lenders likely to approve your application and select a mortgage that suits your income and lifestyle. Prime rates are typically offered to borrowers with good to excellent credit scores, usually starting at a FICO score of 670. Even with fair credit, you may find a mortgage with competitive rates.
2. Your down payment: Putting more money down upfront benefits your interest rate. A down payment of at least 20% of the home’s purchase price generally results in a lower rate and eliminates the need for mortgage insurance, reducing your overall expenses.
3. Your loan term: Although the 30-year mortgage is popular, you can also opt for terms like 20, 15, or 10 years. Shorter terms usually offer lower rates but higher monthly payments. Longer terms may have lower monthly payments but result in higher total interest payments over the loan’s duration.
4. Interest rate type: Mortgages come with fixed or variable rates. Fixed-rate mortgages maintain a consistent interest rate, whereas adjustable-rate mortgages (ARMs) start with a fixed rate that later adjusts based on market conditions. Choosing between these rates depends on your financial objectives and risk tolerance.
Understanding prequalification vs. preapproval: Both processes help determine your affordability, but in different ways. Prequalification provides a rough estimate of what you can borrow based on basic information. Preapproval involves a thorough evaluation of your finances to offer a more accurate lending estimate.
For more in-depth information on mortgage rate changes, stay informed on market news. Lenders closely monitor the Federal Reserve’s benchmark interest rate, known as the Fed rate, which influences various financial products, including mortgages. While mortgage rates don’t directly mirror the Fed rate, they reflect similar factors considered by the Federal Reserve, leading to rate adjustments in response to economic conditions like inflation.
The Federal Reserve made significant interest rate cuts in 2024, with a half-point cut in September followed by two quarter-point cuts in November and December. On May 7, 2025, the Fed decided to pause its rate cuts for the third time in a row, keeping the federal funds target interest rate unchanged at 4.25% to 4.50%. The decision was based on the Fed’s goals of achieving maximum employment and controlling inflation at 2%.
The Fed highlighted the stability of the unemployment rate and solid labor market conditions in its post-meeting statement. However, it also noted increased uncertainty surrounding the economic outlook. The Fed stated that future adjustments to interest rates would depend on incoming data, the evolving economic outlook, and risk assessment.
After projecting only two quarter-point cuts for 2025 following March’s meeting, the Fed is expected to maintain the interest rate range at its next policy meeting on June 17–18, 2025. Market expectations suggest a high likelihood of rates remaining unchanged. Economists are closely monitoring inflation and labor reports to gauge the timing of potential future rate cuts.
Recent jobs data showed moderate job growth in May, while inflation rates have fluctuated but remain above the Fed’s 2% target. Federal Reserve Chair Jerome Powell warned of potential challenges ahead, including supply shocks that could impact inflation levels. The Fed will announce its rate decision on June 18, 2025, with a focus on navigating economic uncertainties and maintaining stability.
Here are some other topics covered in our mortgages and homebuying series:
– An overview of mortgage shopping in 2025 for homebuyers
– Information on 4 popular mortgage loan types: Conventional, FHA, VA, and jumbo loans
– The best time to consider refinancing your mortgage
– Understanding how a mortgage rate lock works
– Steps to switch from an adjustable-rate mortgage to a fixed-rate mortgage
– Frequently asked questions about mortgage rates
In addition to these resources, we offer a variety of personal finance guides to help you manage your finances effectively and achieve your financial goals.
Definitions:
– Mortgage lenders are financial institutions that provide homebuyers with loans.
– Loan servicers handle administrative tasks related to your loan, such as processing payments and communicating with borrowers.
Refinancing:
– Refinancing involves replacing your current mortgage with a new loan from a different lender that offers better terms and lower rates.
– This process typically results in the new lender paying off your old mortgage, and you make payments to the new lender.
Homebuyer Assistance:
– Even if you’ve previously owned a home, you may still qualify for homebuyer assistance programs under certain conditions.
– The IRS and HUD define a first-time homebuyer as someone who has not owned a principal residence in the past three years.
Adjustable-Rate Mortgages (ARMs):
– ARMs have variable interest rates that adjust periodically after an initial fixed-rate period.
– Understanding the terms of an ARM, such as a 5/1 ARM, is crucial to managing your mortgage effectively.
Negotiating Mortgage Rates:
– While negotiating mortgage rates directly may not be common, you can explore other ways to reduce costs when selecting a lender.
– Some lenders offer lower rates in exchange for upfront fees known as mortgage points, which can lower your interest rate.
Estate Planning and Mortgages:
– Mortgages are treated differently from other debts in estate planning and are typically settled before passing assets to heirs.
– Most mortgages are non-transferable, requiring careful consideration in estate planning.
The property title can only be transferred once the home is fully paid off. Those who are on the loan are the ones who can be held responsible for the mortgage. Find out what happens to your mortgage after you pass away. If you are a homeowner, you may be able to use your home’s equity to cover unexpected or high-dollar expenses. This can be a good option for paying for home improvements, settling high-interest credit card debt, or handling emergencies without refinancing and without losing your current low-rate mortgage. Generally, you will need a good credit score and sufficient equity in your home to qualify. Learn how to access your home equity while interest rates are low.
Please note that the rates mentioned were as of Monday, June 9, 2025, at 6 a.m. ET, and may vary based on region and are subject to change.
Sources:
– Mortgage Industry Insights, Bankrate. Accessed June 9, 2025.
– Primary Mortgage Market Survey, Freddie Mac. Accessed June 6, 2025.
– Employment Situation Summary, U.S. Bureau of Labor Statistics. Accessed May 5, 2025.
– Consumer Price Index Summary, U.S. Bureau of Labor Statistics. Accessed May 14, 2025.
– Producer Price Index News Release Summary, U.S. Bureau of Labor Statistics. Accessed May 16, 2025.
– CME FedWatch Tool, CME Group. Accessed June 9, 2025.
