Facts: The average 30-year fixed mortgage rate from Freddie Mac rose to 6.89%, up from 6.86% last week. With this rate and a 20% down payment, the monthly mortgage payment amounts to $2,105 for a home priced at $400,000. With a 10% down payment, the typical payment would be $2,369. This does not include HOA fees, insurance, maintenance, and more.
Level set now: These mortgage rates are higher than those seen in the last 16 weeks. This increase results from the bond market responding to economic news, such as government credit rating announcements and tariff discussions. Regardless of the reason, homebuyers waiting on the sidelines for rates to drop will likely be waiting a long time. There is no expectation for lower rates, and home prices continue to climb in most markets. A comprehensive analysis of monthly costs is crucial for all homebuyers, rather than focusing on minor fluctuations in mortgage rates. Rates are only one component.
To watch: Fannie Mae and Freddie Mac currently back about 70% of U.S. home loans. If a change occurs, it would impact the 30-year fixed mortgage rate and could lead to an increase in the cost of borrowing.
