Mortgage rates rose slightly this week but remain under 7%

The average 30-year fixed-rate mortgage is at its highest level since early February

By Mark Huffman of ConsumerAffairs

May 30, 2025

• Mortgage rates remain stable but elevated, with the 30-year fixed-rate mortgage rising slightly to 6.89% as of May 29, 2025 the highest level since early February driven by rising bond yields and economic uncertainties.

• Forecasts predict rates will hover between 6.7% and 7.1% through early July, with potential peaks near 7.17%, as market volatility and inflation concerns continue to weigh on lending conditions.

• Key influences on mortgage rates include the Federal Reserves cautious stance, inflation trends, bond market movements, and the strength of the labor market all of which may shape future rate trajectories.

Mortgage rates are remaining stable even as bond yieldsrise. Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.89% this week, recording a slight increase to its highest level since early February.

This week, the 30-year fixed-rate mortgage rose slightly higher, said Sam Khater, Freddie Macs chief economist. Aspiring buyers should remember to shop around for the best mortgage rate, as they can potentially save thousands of dollars by getting multiple quotes.

Current rates

• The 30-year FRM averaged 6.89% as of May 29, 2025, up from last week when it averaged 6.86%. A year ago at this time, the 30-year FRM averaged 7.03%.

• The 15-year FRM averaged 6.03%, up from last week when it averaged 6.01%. A year ago at this time, the 15-year FRM averaged 6.36%.

This increase is primarily driven by rising bond yields and economic uncertainties, including concerns over federal debt and changing trade policies .

Forecasts suggest that mortgage rates will hover between 6.7% and 7.1% through early July. For instance, projections indicate an average rate of 6.96% by mid-June, with potential peaks reaching up to 7.17%.

Here are some factors that could influence mortgage rates over the next six months:

• Federal Reserve Policy: The Fed is currently maintaining a cautious stance on interest rates, with no immediate cuts anticipated. This approach is due to persistent inflation concerns and economic uncertainties.

• Inflation Trends: Recent data shows a slight decline in inflation to 2.3% year-over-year in April. However, ongoing tariff-related price increases may not yet be fully reflected, potentially influencing future inflation readings.

• Bond Market Dynamics: Yields on long-term U.S. Treasury bonds have risen sharply due to concerns over federal debt and recent tax-cut proposals. These higher yields contribute to increased mortgage rates .

• Economic Growth and Employment: A strong labor market continues to support higher mortgage rates. However, any signs of economic slowdown or rising unemployment could prompt a reassessment of rate policies.

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