What’s Up With That?
The current average interest rate for a 30-year fixed-rate mortgage is hovering around 7% as of today, May 27, 2025. Several interconnected factors contribute to this level:
Factors In The Play
Pending Federal Tax Bill: Uncertainty surrounding the finalization of the federal tax bill is a key driver in the short term. This uncertainty tends to keep 30-year rates in the 7% range as the market assesses potential economic impacts.
Overall Economic Conditions: Mortgage rates are significantly influenced by the broader economic environment, including inflation, economic growth, and the bond market. While specific reasons for the current 7% level aren’t solely pinpointed to a single event today, the general trend of moderately higher rates reflects the ongoing adjustments within the economy.
Bond Market Activity: Mortgage rates often track the yield of the 10-year Treasury bond because mortgage-backed securities compete with these bonds for investors. Fluctuations in the bond market due to economic data and investor sentiment can translate to changes in mortgage rates.
Federal Reserve Policy: Although the Federal Reserve doesn’t directly set mortgage rates, its monetary policy, including adjustments to the federal funds rate and its stance on inflation, indirectly influences them.
What Now?
In case you never figured it out, stock market and rates go hand-in-hand. Volatility in market drives rates up and down. Catch that house now, you can always refinance later.
Why?
History always repeats. Looking back at lower rates, house prices always go up, – way up. Waiting for perfect rate, you will set yourself for a trap, – that house will shoot up in price.
