Interest rates on mortgages decrease for a fifth consecutive week, reaching a low not seen since mid-April.
In a significant development, mortgage rates have been declining for the fifth week in a row, as reported by Freddie Mac's Primary Mortgage Market Survey. The latest reading shows that the average rate on the benchmark 30-year fixed mortgage now stands at 6.67%, marking a substantial decrease from the 6.95% recorded a year ago.
The lowest level for mortgage rates since mid-April has been reached, offering some relief to prospective homebuyers. According to Sam Khater, Freddie Mac's chief economist, this is the largest weekly decline since early March.
The shift in power from sellers to buyers in the U.S. housing market is driven by several key factors. The increase in the number of homes available for sale is one such factor, giving buyers more choices and weakening seller leverage. For instance, Florida's active listings grew by 22.7% to 181,822 in May, while Texas's Central region saw a 26% rise in listings compared to 2024.
Another factor is the stagnant or declining price growth. Median home prices have either flattened or slightly declined, with Florida's median sales price dropping 0.8% year-over-year to $390,000 by early 2025. Redfin projects an overall 1% price decline by the end of 2025.
High cancellation rates in markets like Texas, combined with economic uncertainty, are also contributing to the shift in the housing market. These factors are slowing market activity and enabling buyers to negotiate better deals.
Elevated mortgage rates, which have remained above 6.5%, continue to dampen buyer demand and discourage some potential sellers from listing. This high cost of borrowing, despite price moderation, restricts affordability.
Despite the recent dip in mortgage rates, they remain high enough to temper demand and increase buyer leverage. As a result, the housing market in 2025 is transitioning to a buyer’s market, marked by increased inventory, slowing price growth, and persistently high mortgage rates that constrain demand and empower buyers.
[1] Source: Realtor.com Market Trends Report, May 2025 [2] Source: Freddie Mac Primary Mortgage Market Survey, 2025 [3] Source: Redfin Market Report, 2025 [4] Source: National Association of Realtors Housing Report, 2025
- The recent decline in mortgage rates, while offering some relief to prospective homebuyers, remains high enough to temper demand, thriving in the turbulent economic and financing landscape of 2025.
- In the shifting U.S. real-estate market, the increasing number of available homes and the stagnant or declining price growth are powered by factors such as economic uncertainty, high cancellation rates, and the deterrent effect of elevated mortgage rates on borrowers.
- With personal-finance concerns mounting due to the high cost of borrowing, investors are watching the trend of mortgage rates and incoming data on the housing market closely, as the market in 2025 swings toward a buyer's market characterized by increased inventory, slowing price growth, and persistently high mortgage rates.
