Mortgage rates are holding steady to close out the week, with the average 30-year fixed rate remaining at 6.500%. This stability comes amid a flurry of new economic data showing a housing market in transition, as a significant surge in available homes gives potential buyers the most options they’ve seen in five years.
Homebuyers are navigating a complex environment where prices are beginning to soften in many areas, even as borrowing costs remain elevated compared to recent years. Here’s a look at the current mortgage rates and the market forces shaping them today.
Today’s Mortgage Rates: Friday, August 22, 2025
Here are the national average mortgage rates for popular loan types as of Friday morning. These rates are based on data from Zillow Home Loans and can vary based on your location, credit score, and down payment.
- 30-Year Fixed-Rate: The average rate is 6.500%, with an APR of 6.657%.
- 15-Year Fixed-Rate: The average rate is 5.625%, with an APR of 5.929%.
- 30-Year FHA Loan: The average rate is 6.000%, with an APR of 6.702%.
- 30-Year VA Loan: The average rate is 6.125%, with an APR of 6.427%.
Market Heats Up Slightly as Inventory Hits 5-Year High
While high borrowing costs have kept the housing market cooler than during the pandemic-era boom, new data from the National Association of Realtors (NAR) signals a potential shift. Sales of existing homes ticked up by 2% in July, but the biggest news is the sharp increase in housing inventory.
There were 1.55 million homes for sale in July, a nearly 16% increase from a year ago. According to NAR Chief Economist Lawrence Yun, the market now has the highest inventory since 2020.
What This Means for Homebuyers
This surge in available homes is welcome news for buyers who have been frustrated by limited choices. More inventory typically leads to less competition, giving buyers more negotiating power and reducing the likelihood of bidding wars. Coupled with recent reports of softening home prices in major metro areas, the current market may offer a window of opportunity for those who can afford today’s rates.
All Eyes on the Fed as September Meeting Approaches
Looking ahead, the Federal Reserve’s meeting in mid-September is the next major event that could influence mortgage rates. While the Fed does not set mortgage rates directly, its decisions on the federal funds rate create a ripple effect across the economy.
However, economists caution that a potential rate cut might not lead to a dramatic drop in mortgage rates. According to the Mortgage Bankers Association, the market has likely already “priced in” the anticipation of a cut. Their forecast suggests rates will likely remain in the 6.6% range through the end of the year.
Is the “Lock-In Effect” Finally Easing?
The recent rise in inventory also suggests that the “lock-in effect” may be starting to thaw. For years, homeowners with ultra-low mortgage rates from 2020 and 2021 have been hesitant to sell and take on a new loan at a much higher rate. The fact that more homes are now hitting the market indicates that life changes—such as new jobs or growing families—are compelling more people to move despite the higher-rate environment.
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