Mortgage Rates Drop: Great News for Homebuyers on April 29, 2025

Check out CryptonesiaMoney's weekly mortgage rate forecast for a more in-depth look at what’s next for Fed rate cuts, labor data and inflation.

Fluctuations in mortgage rates aren’t unheard of, yet the current real estate landscape remains notably uncertain. Persistent inflation, looming concerns over international trade tensions, along with growing worries about an economic downturn, have caused mortgage rates to oscillate significantly in recent weeks.

Currently, the typical interest rate for a standard 30-year fixed mortgage stands at 6.88%, marking a decline of -0.05% from the previous week. For those considering a 15-year fixed mortgage, the average rate is now 6.09%, reflecting a drop of -0.06% compared to the prior week.

The majority of housing economists anticipate average rates for a 30-year fixed mortgage To fluctuate between 6.5% and 7% over the course of the year, potentially prompting certain homebuyers to jump into the market before spring arrives. Concurrently, high home prices and limited inventory , atop the erosion of purchasing power, remains a challenge.

"Diminished consumer trust and possible layoffs during an economic downturn might cause some purchasers to hold back," stated Nicole Rueth SVP of the Rueth Team Powered by Movement Mortgage stated, "However, for individuals who have been awaiting better affordability and possess job security, lower interest rates will create opportunities."

As soon as mortgage rates begin dropping, prepare yourself to seize the opportunity. Financial advisors suggest browsing various options and examining several proposals to secure the best interest rate. Fill out your details below to receive a personalized quotation from one of Cryptonesia’s collaborating lending institutions.

About these rates: Bankrate’s tool includes interest rates provided by partnering lenders which you can utilize during your comparison of various mortgage options.

Recent mortgage rate trends

The Federal Reserve maintained elevated interest rates this year as it evaluates the effects of the Trump administration’s significant economic policies. Reduced lending costs would eventually spread throughout the economy, particularly benefiting the housing sector. Nonetheless, the federal reserve does not directly determine mortgage rates for borrowers.

"Although the Fed plays a significant role, it isn’t the sole actor," stated Rueth. Interest rates for home loans are strongly connected to the bond market, particularly following movements in 10-year Treasury yields; these yields usually decrease when economic expansion slows down. As per Rueth, “Movements in the bond market depend on factors such as inflation, economic indicators, and worldwide occurrences like trade tariffs or political instability.”

Even though mortgage rates have stayed relatively constant amidst the administration's fluctuating policies, their future trajectory remains uncertain for the upcoming months. Should the economy decelerate and the Federal Reserve initiate rate reductions in late spring, potential homebuyers should not anticipate finding mortgage rates as low as those seen during the pandemic era.

"People who are holding out for mortgage rates of 3% again are essentially just wasting their time. Those periods have passed," stated Rueth.

To view the changes in mortgage rates over recent years, refer to the graph below.

Is it likely that mortgage rates will decrease in 2025?

Check out CryptonesiaMoney's mortgage forecast for 2025 Here’s an overview of where several key housing agencies anticipate average mortgage rates will end up.

Which mortgage term and type should I pick?

Every mortgage includes a loan term, essentially defining the repayment period. Typically, the two primary durations are 15 and 30 years; however, options like 10-, 20-, and even 40-year loans can be found as well. In a fixed-rate mortgage, the interest rate remains constant throughout the entire loan period, providing predictability. Conversely, with an adjustable-rate mortgage, the initial interest rate stays unchanged for a specific timeframe—often five, seven, or ten years—and then fluctuates yearly according to current market conditions. If your intention is to reside in one place over an extended period, a fixed-rate mortgage might suit you best. On the other hand, those seeking potentially reduced introductory rates could opt for an adjustable-rate mortgage.

30-year fixed-rate mortgages

Today, the average for a 30-year fixed-mortgage rate stands at 6.88%. This type of mortgage is the most popular choice due to its standard 30-year repayment period. Although it typically comes with a higher interest rate compared to a 15-year mortgage, it offers borrowers smaller monthly payments.

15-year fixed-rate mortgages

Currently, the typical rate for a 15-year, fixed-rate mortgage stands at 6.09%. Although your monthly payments will be larger compared to those of a 30-year fixed mortgage, a 15-year loan generally offers a more favorable interest rate. This enables you to accumulate less total interest over time and clear your home loan faster.

5/1 adjustable-rate mortgages

A 5/1 adjustable-rate mortgage currently averages at 6.10%. Initially, this type of loan usually offers a reduced starting interest rate for the initial five-year span. However, following this phase, your interest rates may increase each year based on market conditions. Therefore, if your intention is to either sell or renegotiate your home loan within those first five years, a 5/1 ARM might be a suitable choice.

Determine your monthly mortgage amount.

Securing a mortgage should invariably be based on your current financial standing and future objectives. The crucial step is to create a budget and aim to keep expenses within your affordability range. Cryptonesia's mortgage calculator The following can assist homebuyers in preparing for their monthly mortgage payments.

What’s the best way to locate the most favorable mortgage rates?

Even with elevated mortgage rates and home prices, the housing market isn't destined to stay unaffordable indefinitely. Now is as good a time as ever to start saving for a down payment and enhancing your credit score so that you can obtain a favorable mortgage rate once the conditions are suitable.

1. Set aside money for a larger initial payment: Although a 20% initial payment is not mandatory, making a bigger down payment leads to a reduced loan amount, thereby helping you cut down on interest costs.
2. Boost your credit score: You may be eligible for a conventional mortgage with a credit score as low as 620, however, securing a minimum score of around 740 would typically land you more favorable interest rates.
3. Pay off debt: Specialists suggest maintaining a debt-to-income ratio of 36% or below to assist you in securing the most favorable interest rates. Being free from additional debts can improve your ability to manage your monthly payment obligations effectively.
4. Research loans and assistance: Loans provided by the government come with more lenient borrowing criteria compared to traditional loans. Additionally, certain governmental or private initiatives may assist you with covering your downpayment and closing expenses.
5. Shop around for lenders: Investigating and contrasting various loan proposals from several creditors might assist you in obtaining the most favorable mortgage rate tailored to your circumstances.

Share this post