THIS WEEK'S MORTGAGE INTEREST RATE UPDATE: FEBRUARY 25, 2025
By Meredith Amon, Licensed in Alabama and Florida
Current Mortgage Rate Trends
As of Tuesday, February 25, 2025, the national average mortgage rate for a 30-year fixed-rate loan is 6.93%, reflecting a 4 basis point decrease over the past week. For homeowners looking to refinance, the national rate for a 30-year fixed refinance is 6.94%, rising 1 basis point compared to last week. The 15-year fixed refinance remains steady at 6.32% with no change over the last seven days.
While interest rates have shown minor fluctuations, they remain relatively high compared to expectations set by the Federal Reserve’s recent rate cuts. The 30-year fixed-rate mortgage hovers around 7%, slightly down from last week but still a challenge for homebuyers hoping for a significant drop.
Mortgage Rate News: February 20, 2025
According to Bankrate’s latest lender survey, the 30-year fixed mortgage rate has dipped to an even 7.00%. While this movement is welcome news for buyers and refinancers, rates remain elevated due to stubborn inflation.
The Labor Department’s latest inflation report indicates inflation is back up to 3%, which impacts expectations for future Federal Reserve rate cuts. While the Fed did not announce any changes to its benchmark rate at its most recent meeting, its three previous rate cuts, starting in September 2024, have not led to the mortgage rate relief many expected.
Economists had projected that the Fed’s easing policies would drive mortgage rates below 6% by early 2025. However, due to market volatility and investor caution, rates have remained elevated, largely influenced by 10-year Treasury bond yields.
Mortgage Rate Forecast: What’s Next?
Financial experts predict that mortgage rates will remain around 7% in the near term. According to Dr. Anthony O. Kellum, President & CEO of Kellum Mortgage, "I believe interest rates will remain unchanged in the coming week. While there are ongoing discussions about inflation and the Federal Reserve’s next moves, the current economic data suggests a period of stability. With mixed signals from labor markets and inflation reports showing gradual easing, I don’t anticipate a major shift in rates in the immediate term."
Mortgage Rate Overview (February 25, 2025)
| Loan Type | Interest Rate | APR |
|---|---|---|
| 30-Year Fixed | 6.93% | 6.98% |
| 20-Year Fixed | 6.76% | 6.82% |
| 15-Year Fixed | 6.27% | 6.34% |
| 10-Year Fixed | 6.27% | 6.35% |
| 5-1 ARM | 6.23% | 6.90% |
| 10-1 ARM | 7.12% | 7.23% |
| 30-Year Fixed FHA | 7.03% | 7.07% |
| 30-Year Fixed VA | 6.83% | 6.87% |
| 30-Year Fixed Jumbo | 7.06% | 7.11% |
How to Secure the Best Mortgage Rate
If you’re planning to buy a home or refinance in 2025, shopping around for the best mortgage rate can save you thousands over the life of your loan. Here are some essential steps to get the best rate:
- Understand Your Credit Profile – Higher credit scores lead to better rates. If possible, improve your credit score before applying for a mortgage.
- Compare Loan Options – Fixed vs. adjustable, 15-year vs. 30-year—choosing the right loan type can impact your rate and long-term savings.
- Get Multiple Quotes – Compare loan offers from different lenders to find the most competitive rate.
- Consider Discount Points – Paying points upfront can lower your interest rate over the life of the loan.
- Factor in Additional Costs – The APR (annual percentage rate) reflects both interest and lender fees, providing a more accurate comparison than the interest rate alone.
What This Means for Gulf Coast Buyers and Sellers
For buyers, this week’s rates may provide a small window of opportunity to lock in a rate before potential future increases. While rates remain high compared to pre-2022 levels, working with the right lender and a knowledgeable real estate advisor can help you maximize affordability.
For sellers, the steady rates reinforce the need to price homes competitively and highlight unique features that set listings apart in today’s market. Buyers are still active, especially in the Gulf Coast market, but affordability remains a key concern.
If you're considering buying or selling along the Gulf Coast, I’d love to help you navigate the market and find the best opportunities available.
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