Mortgage Rates Drop for Two Consecutive Days Over a 30-Year Period
Living in a world of perpetual change, the dance of mortgage rates is a constant affair. With a captivating dip below 7%, the 30-year mortgage rate averaged 6.91% on Wednesday, May 8, 2025, after a two-day free fall. Various other mortgage types, such as 15-year loans and jumbo loans, also saw their rates descend.
In an ever-competitive market, it's essential to be a savvy shopper – comparing rates among lenders is crucial, irrespective of the mortgage type you're eyeing. Remember, like a diamond, the best mortgage rate isn't simply the prettiest; it's the one that fits your wallet best.
Explore today's Mortgage Rates – May 8, 2025
Today's New Purchase Mortgage Rate Averages
Boasting a 2-day descent, the 30-year mortgage rate sank a total of 9 basis points to claim a more cushioned 6.91% average. Though this exceeds mid-April's peak of 7.14%, it's still a significant improvement from May 2024's most expensive reading of 6.91%.
Looking back to the previous autumn, 30-year rates bottomed out at a 2-year low of 5.89%, which was about a percentage point cheaper than their current rates. On the other hand, during the final months of 2023, rates surged to an approximate 23-year peak of 8.01%.
15-year mortgage rates carved out a 3-basis point decline on Wednesday, slipping below 6% to settle at 5.97%. This represents a 34-basis point decrease compared to the April 11 average of 6.31%, making it the highest 15-year reading in close to a year. Last September, 15-year rates plummeted to 4.97%, less than half of their current average. Surprisingly, October 2023 saw 15-year rates spike to a gargantuan 7.08%, another 23-year record.
Jumbo 30-year mortgage rates shaved off 6 basis points on Wednesday, reaching an average of 6.88%. Three weeks prior, they were a 10-month high at 7.15%. Going back to September, jumbo 30-year rates marveled at a stunning 19-month low of 6.24%. October 2023 marked a stark contrast as the average rocketed to an estimated 8.14%, a presumably 20-year record.
The Weekly Freddie Mac Average
As a distinguished arbiter, Freddie Mac, a trusted government-sponsored mortgage buyer, releases its weekly average on Thursdays. On the current reading, Freddie Mac's average held steady at 6.76%, following a 7-basis point decrease over the previous fortnight. Compared to September's historic low of 6.08%, the present average hasn't yet reached the glory days. Conversely, October 2023 witnessed a grim rise in Freddie Mac's average to a staggering 23-year peak of 7.79%.
Freddie Mac's average differs from ours, as it incorporates five days of rates from the past week, while we provide a more instant and precise indicator by reporting daily rates. Additionally, the selection criteria for included loans, including down payment amounts, credit scores, and inclusion of discount points, can differ noticeably from Freddie Mac's methodology.
Your Personal Mortgage Journey
Equip yourself with our Mortgage Calculator to plot a course for your personal mortgage adventure.
Essential
We must clarify that the rates we publish aren't directly comparable to the teaser rates advertised online, as they're chosen for their allure. Teaser rates often involve advanced payments or are reserved for borrowers with impeccable credit scores or smaller-than-average loans. Ultimately, the rate you secure will be contingent on factors like credit score, income, and more – which could deviate from the averages shown here.
Your monthly mortgage payment is a delicate dance involving home price, down payment, loan term, property taxes, homeowners insurance, and, of course, the interest rate on the loan. Adjust these inputs below to gauge your potential monthly payment.
Click HereClick Here## What thrusts Mortgage Rates up or down?
Mortgage rates are choreographed by an intricate interplay of macroeconomic and industry factors, including:
- The level and direction of the bond market, specifically 10-year Treasury yields
- The Federal Reserve's current monetary policy, taking into account its influence on bond buying and government-backed mortgages
- Competition between mortgage lenders and across loan types
Given the simultaneous dance among these variables, it's often difficult to attribute the change to a single factor.
An empowered economy with low unemployment frequently drives mortgage rates up due to growing demand for housing. Conversely, economic downturns or high unemployment levels can lead to decreased demand and lower mortgage rates.
The Federal Reserve's actions on the federal funds rate may impact mortgage rates indirectly, as adjustments influence banks' borrowing costs, which, in turn, can impact mortgage rates.
The bond market plays a crucial role in shaping mortgage rates, with long-term bond yields exerting particular influence, particularly the 10-year Treasury yield. When bond interest rates escalate, mortgage rates typically rise as lenders compensate for market conditions.
Global economic conditions and geopolitical events can also sway mortgage rates, as they influence economic stability and investors' confidence.
Lastly, individual circumstances, such as credit score, down payment amount, and loan type, can impact the specific mortgage rate offered to a borrower.
- In the competitive mortgage market, comparison of rates among lenders is crucial, as the best mortgage rate isn't necessarily the lowest; it's the one that best fits one's wallet.
- On Wednesday, May 8, 2025, the 30-year mortgage rate saw a significant two-day fall, averaging 6.91%, while the 15-year mortgage rate declined by 3 basis points, settling at 5.97%.
- Non-traditional mortgage types, like jumbo loans, also experienced a change, with jumbo 30-year mortgage rates shedding 6 basis points to average 6.88%.
- In personal-finance matters, it's essential to understand that the rates published aren't directly comparable to the teaser rates advertised online, as they are often reserved for borrowers with excellent credit scores or smaller-than-average loans.
- Liquidity in the mortgage market can be influenced by various factors, such as the bond market, the Federal Reserve's monetary policy, and competition between mortgage lenders, making it challenging to attribute rate changes to a single cause.
