Mortgage rates ticked down again Monday, with the average 30-year fixed rate falling to 6.88%. Homebuyers navigating a high-rate market may find modest relief, but will the trend continue?
National mortgage rates as of June 23, 2025
Zillow reports the following averages:
- 30-year fixed: 6.88% (down 0.02%)
- 15-year fixed: 5.90% (down 0.02%)
- 5-year ARM: 6.99% (down 0.06%)
These declines reflect slight week-over-week drops, with the 30-year rate down from 6.91% last Monday. Jumbo loans and government-backed loans have also seen fluctuations, highlighting the importance of comparing loan types.
Are mortgage rates predicted to drop?
Economists remain divided on where rates are headed. While inflation data and Federal Reserve signals hint at possible late-year cuts, market volatility makes timing uncertain. The Fed has paused interest rate hikes in recent months, but continues to monitor economic indicators closely.
Some forecasts suggest modest rate declines later this year, especially if inflation trends downward and the economy cools. However, geopolitical risks and unexpected economic data could still drive short-term rate spikes. Buyers are encouraged to stay informed and flexible.
Sample monthly payments at current rates
Here are estimated monthly principal and interest payments based on the latest 30-year fixed rate (6.88%) and a 20% down payment:
- $300,000 mortgage: ~$1,970/month
- $500,000 mortgage: ~$3,280/month
- $800,000 mortgage: ~$5,250/month
These figures assume good credit and do not include taxes, homeowner’s insurance, or HOA fees, which can vary widely by state and neighborhood.
What income is needed for an $800,000 mortgage?
To comfortably afford an $800,000 mortgage at 6.88%, borrowers may need a household income of $175,000 to $200,000+ annually. This estimate assumes:
- A 20% down payment ($160,000)
- A monthly payment of ~$5,250
- A maximum debt-to-income ratio of 36%
- Minimal additional debt obligations
Lenders may also consider job stability, savings, and credit history during the approval process.
Historical mortgage rate trends
Mortgage rates have risen sharply since historic lows during the pandemic. In 2021, the average 30-year fixed rate was below 3%, but persistent inflation led to a series of rate hikes in 2022 and 2023. Since early 2024, rates have remained volatile but are trending slightly downward in 2025.
Over the past 90 days, the 30-year fixed rate has ranged from 6.41% to 6.94%, illustrating the importance of timing and preparation for prospective homebuyers.
How to get the best mortgage rate
- Boost your credit score: Scores above 740 typically unlock lower rates.
- Increase your down payment: 20% or more can improve offers.
- Shop multiple lenders: Compare loan estimates for best deals.
- Consider loan types: Fixed vs. ARM options have trade-offs.
- Lock your rate wisely: Watch market trends and Fed announcements.
Using a mortgage broker or online comparison tools can also help identify competitive offers. Be sure to evaluate not just rates, but total loan costs including points, fees, and APR.
Should you lock in now or wait?
If you’re buying soon, it may be wise to lock in today’s rate, especially with ongoing market swings. Even small increases can significantly impact long-term costs. However, if you have flexibility and believe rates may fall, staying alert to economic updates and inflation trends is key.
Refinancing may also be an option if rates decline in the future, though this comes with its own costs and requirements.
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