As of August 12, 2025, mortgage rates remain largely unchanged, with the 30-year fixed rate sitting at 6.5% and the 15-year fixed at 5.625%, according to Zillow Home Loans. While steady, these rates are still high enough to keep many buyers—and sellers—out of the market.
In a recent earnings call, Zillow’s leadership painted a bleak picture of the current housing landscape: demand is weak, inventory remains tight in many areas, and affordability continues to deteriorate. Even as new listings rise, buyers are hesitant.
Where mortgage rates stand now
Zillow Home Loans’ current averages include:
- 30-Year Fixed: 6.500% (APR: 6.654%)
- 15-Year Fixed: 5.625% (APR: 5.906%)
- 20-Year Fixed: 6.125% (APR: 6.371%)
- 30-Year FHA: 6.000% (APR: 6.680%)
- 30-Year VA: 6.125% (APR: 6.424%)
- 7-Year ARM: 6.875%
Rates last updated August 11, 2025
Zillow sounds alarm on buyer demand
During its Q2 2025 earnings call, Zillow CEO Jeremy Waksman said that the housing market continues to face the same challenges that began in 2022:
- Persistent high prices: Home values haven’t dropped enough to offset high borrowing costs.
- Buyer hesitation: Many first-time buyers are waiting, worried about affordability.
- Sellers holding back: Homeowners with low-rate mortgages aren’t eager to sell and re-finance at higher rates.
- Limited affordability: A shortage of affordable homes—especially new builds—is slowing recovery.
Waksman emphasized that the housing rebound originally forecast for 2025 may not materialize at all this year.
Why mortgage rates remain high
Several key factors are contributing to elevated rates:
- Federal Reserve policy: The Fed hasn’t signaled significant rate cuts in the short term.
- Inflation pressures: Though cooling in some areas, inflation remains above target.
- Construction bottlenecks: Material costs and labor shortages have kept new home construction below demand.
These pressures create a “sticky” environment for mortgage rates—high enough to cool buyer activity, but not yet falling enough to spark a turnaround.
Tips to lower your mortgage rate
Buyers still in the market can take steps to reduce their interest rate:
- Improve your credit score: Higher scores often lead to better rates.
- Increase your down payment: More equity up front lowers lender risk.
- Reduce debt-to-income ratio: Less debt improves approval odds and rate offers.
- Shop around: Compare lenders before locking in a rate.
Zillow’s BuyAbility tool can provide personalized rate estimates based on your income, credit, and location.
Should you lock in now or wait?
If you’re buying within the next two months and can afford today’s payment structure, it may be smart to lock your rate now—especially if further rate drops seem unlikely in the short term.
However, if you’re flexible on timing or expect economic shifts this fall, you may benefit from waiting. Experts say a sub-6% average won’t return without more significant changes in monetary policy or inflation.
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