Mortgage rates today are continuing to hover near recent highs, presenting ongoing challenges for buyers and sellers navigating the tight U.S. housing market. As of August 4, 2025, Zillow data shows that 30-year and 15-year fixed-rate mortgages remain well above pandemic-era lows—further intensifying the affordability crisis that has defined much of 2024 and 2025.
Current mortgage rate averages (August 4, 2025)
According to Zillow Home Loans, today’s mortgage rates are as follows:
- 30-year fixed: 6.50% APR
- 15-year fixed: 5.625% APR
- 30-year FHA: 6.72% APR
- 30-year VA loan: 6.56% APR
- 20-year fixed: 6.61% APR
- 7-year ARM: 6.375% APR
These figures reflect continued pricing pressure from inflation, Federal Reserve policy, and limited housing inventory in key metro markets.
Rate trends: What’s changed and what hasn’t?
Mortgage rates have remained relatively flat over the past month, offering little relief for potential homebuyers. After months of volatility, this plateau suggests lenders are awaiting clearer signals from the Federal Reserve regarding interest rate cuts—which remain unlikely until inflation consistently drops closer to the Fed’s 2% target.
- June median listing price: $441,000 (Zillow)
- Current affordability index: Near decade lows
- Buyer sentiment: Declining, especially among first-time buyers
“With rates at 6.5% or higher, affordability remains a serious issue for many would-be buyers,” said Realtor.com’s Hannah Jones. “Even modest rate fluctuations can significantly impact monthly payments in this price environment.”
What’s driving mortgage rates right now?
Several core factors are contributing to today’s elevated rates:
- Federal Reserve policy: No rate cuts expected until late 2025
- Persistent inflation: Although easing slightly, still above target
- Tight inventory: Sellers staying put, limiting supply
- Capital gains tax policy uncertainty: Trump’s proposed repeal may impact long-term market turnover
While the Fed hasn’t raised rates in recent months, its language remains hawkish, signaling caution and preventing lenders from slashing rates.
How to get the lowest mortgage rate today
With limited flexibility in headline rates, borrowers can still improve their offers by strengthening their financial profile:
Tips to lower your mortgage rate:
- Increase your credit score
- Make a larger down payment
- Reduce your debt-to-income (DTI) ratio
- Consider shorter-term loans like a 15-year fixed
- Shop multiple lenders and compare APR, not just rates
“Even small improvements in your credit profile can shave significant interest costs over the life of the loan,” according to Zillow’s BuyAbility tool experts.
Should you buy or refinance right now?
Deciding whether to buy or refinance in today’s market depends on your timeline and goals. For buyers, affordability remains a challenge, but waiting for significantly lower rates may not pay off if home prices continue climbing.
For homeowners considering a refinance, the opportunity is limited unless their current rate is above 7%. However, some may explore cash-out refinancing to consolidate high-interest debt.
Consider buying or refinancing now if:
- You plan to stay long-term and can absorb current rates
- You’ve found a motivated seller or competitive price
- You qualify for VA or FHA loans with lower point costs
Consider waiting if:
- Your credit score needs work
- You’re aiming for a shorter-term purchase window
- You rely heavily on rate-sensitive monthly payments
What’s next for mortgage rates?
Many analysts expect mortgage rates to remain elevated through the end of 2025 unless economic data drastically shifts. If inflation drops faster than expected—or if the labor market weakens—the Fed could pivot and signal cuts, which would likely ease mortgage rates.
However, for now, most buyers and sellers are learning to operate in a “new normal”—where 6%–7% mortgage rates are the baseline.
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