Realtor.com chief economist Danielle Hale highlights key indicators from the company’s 2025 outlooks and weighs the pros and cons of buying and renting properties.
Mortgage rates have moved lower for the second consecutive week, resulting in an increase in purchase applications. According to Freddie Mac’s latest Primary Mortgage Market Survey, the average rate on the 30-year fixed mortgage dropped to 6.69%, the lowest since October, from last week’s reading of 6.81%. A year ago, the average rate on a 30-year loan was 7.03%.
About 80% of mortgage holders have a rate below 5%, according to a Zillow survey earlier this year. “This week, mortgage rates decreased to their lowest level in over a month,” said Sam Khater, Freddie Mac’s chief economist. “Despite just a modest drop in rates, consumers clearly have responded as purchase demand has noticeably improved. The responsiveness of prospective homebuyers to even small changes in rates illustrates that affordability headwinds persist.”
The average rate on the 15-year fixed mortgage fell to 5.96% from 6.10% last week. One year ago, the rate on the 15-year fixed note averaged 6.29%. Many would-be buyers and sellers are holding out to see if rates fall further.