Interest rate on 30-year fixed mortgages decreases by 0.15% - August 8, 2025
The Federal Reserve's bond purchases during the pandemic helped keep mortgage rates artificially low, but as we move into 2026, rates are expected to gradually decline. Here's a breakdown of the current forecast for U.S. fixed mortgage rates.
Experts from Fannie Mae, the Mortgage Bankers Association (MBA), Realtor.com, and other key organizations project that the 30-year fixed mortgage rate will end 2025 around 6.4% to 6.5%, and decrease to about 6.0%–6.1% by the end of 2026. Fannie Mae predicts a rate of 6.4% for the end of 2025 and 6.0% for the end of 2026, while the MBA forecasts a slightly higher but trending downward rate of around 6.3% by the end of 2026.
Other fixed-term mortgages, such as 15-year and 20-year, are expected to follow a similar trend but will be slightly lower due to their shorter terms. The 15-year and 20-year fixed mortgage rates are anticipated to decline modestly in 2026, roughly in a band a few tenths lower than the 30-year rate.
Adjustable-rate mortgages (7-year ARM and 5-year ARM) are expected to follow the Federal Reserve's trajectory, with slight rate decreases into 2026. However, these rates will still be influenced by inflation and economic conditions. While forecasts don’t specify exact ARM rates, analysts express cautious optimism for decreasing borrowing costs in 2026 if Fed rate cuts materialize.
Overall, the market consensus suggests that after peaking in early-mid 2025, mortgage rates will ease gradually throughout 2026, with some variability depending largely on inflation trends, Federal Reserve policy shifts, and economic performance.
Here's a summary of key 30-year fixed mortgage rate forecasts for the end of 2025 and the end of 2026:
| Source | End of 2025 Forecast | End of 2026 Forecast | |------------------------------|---------------------|---------------------| | Fannie Mae | ~6.4% | ~6.0% | | Mortgage Bankers Association | ~6.6% | ~6.3% | | Realtor.com / Experts | Mid-6% range | Slight decline to mid or low 6% range | | National Association of Home Builders | Mid-6% range | Not below 6% until late 2026 |
Stay informed about the housing market, as strategic real estate investments are more important than ever to focus on for stability and passive income with mortgage rates expected to remain high in 2025. As of August 8, 2025, the 30-year fixed mortgage rate has decreased by 15 basis points to 6.67%, and the 10-year fixed rate is at 5.48%. The slight dip in the 30-year fixed mortgage rate is a small but encouraging development. The APR for a 30-year fixed mortgage is 7.00%.
The 7-year ARM is at 7.08%, and the 5-year ARM is at 7.38%. The 20-year fixed rate is currently at 6.41%, which is lower than the 30-year fixed rate. The housing market requires staying informed and understanding the various factors at play.
Sources: [1] Fannie Mae Economic & Strategic Research (July 2025): https://www.fanniemae.com/resources/file/research/home/ESR-2025-22.pdf [2] Mortgage Bankers Association Forecast (July 2025): https://www.mba.org/research-and-economic-analysis/research-and-data/forecasts-and-reports/mortgage-finance-forecast [3] Realtor.com Housing Forecast (July 2025): https://www.realtor.com/news/trends/realtorcom-housing-forecast-july-2025/ [4] National Association of Home Builders (July 2025): https://eyeonhousing.org/2025/07/na-h-b-economic-forecast-for-2026/
- As mortgage rates are expected to gradually decline in 2026, personal-finance experts suggest that this could be an opportune moment for investment in the real estate business, especially for fixed-term mortgages like the 30-year, 15-year, and 20-year.
- The Federal Reserve's influence on the mortgage market is apparent, with adjustable-rate mortgages (7-year ARM and 5-year ARM) expected to follow the Fed's trajectory, potentially resulting in slight rate decreases into 2026.
- In the realm of personal finance, understanding the trends in the rental market is also crucial, as the anticipated reduction in mortgage rates might lead to shifts in the rental market growth.
- The mortgage market forecasts suggest that after peaking in early-mid 2025, rates will ease gradually throughout 2026, making it more advantageous for individuals to explore mortgage and finance options, seeking to capitalize on the expected decrease in borrowing costs.
- The growth in the mortgage market is heavily influenced by factors such as inflation trends, Federal Reserve policy shifts, and economic performance, underscoring the importance of staying informed and making prudent financial decisions when it comes to real estate investments and personal finance.
