Mortgage rates ended 2025 with a small but meaningful tailwind for buyers. Freddie Mac reported the average 30-year fixed mortgage fell to 6.15% from 6.18% a week earlier, the lowest level of the year, versus 6.91% a year ago (lowest level in 2025). The 15-year fixed dropped to 5.44% from 5.50%, offering incremental relief for refinancers.
Where it’s happening and why now: the move tracks the bond market more than the Federal Reserve directly. The same update pegged the 10-year Treasury yield around 4.14%, slightly below last week’s 4.15%, which helps lenders price long-term loans a bit lower. Rates began easing earlier in the second half of 2025 as investors anticipated and then saw Fed cuts, though the Fed doesn’t set mortgage rates and the pass-through isn’t automatic.
Immediate impact: affordability improves at the margin, but it doesn’t fix housing math for most households. CBS noted that while listings are up and some sellers are cutting asking prices, affordability remains a major barrier for first-time buyers and uncertainty about the economy and jobs is still keeping people cautious (affordability remains). Existing-home sales rose in November versus the prior month, but through the first 11 months of 2025 sales were down 0.5% from the same period a year earlier, a reminder that lower rates alone haven’t reopened the market.
How this ties to the broader economy: it’s a classic “better, not good” signal. Fox Business pointed to CPI at 2.7% year over year in November and a weakening labor market backdrop as the Fed debates its next steps. It also cited a median existing-home price of $409,200, which keeps monthly payments high even if rates drift lower (median existing-home price).
If you’re making a 2026 housing decision, the key is timing and realism: small rate dips help, but prices, inventory, and job security will determine whether the market actually thaws.
