Home Mortgage Rates Dip Slightly, But Application Activity Remains Low

Home Mortgage Rates Dip Slightly, But Application Activity Remains Low

Home mortgage rates have seen a gradual decline in the final weeks of 2025, although surveys from U.S. lenders show that application activity has remained relatively subdued, according to industry analysts.

Freddie Mac, the government-backed mortgage agency, reported that the average 30-year fixed-rate mortgage was 6.18% for the week ending December 24, a slight drop from 6.21% the previous week. This also represents a decrease from the 6.85% average rate during the same week in 2024. For 15-year fixed loans, the latest average rate was 5.5%, up from 5.47% the week before, but still lower than the 6% average from a year ago.

Despite these declines in rates, many potential homebuyers are still hesitating to make purchases. The Mortgage Bankers Association (MBA) reported a 5% decrease in mortgage applications for the week ending December 19, compared to the prior week. Looking ahead, the MBA expects mortgage rates to remain steady into the new year. However, the pace of home purchases may be affected by ongoing factors like inflation and a weakening job market.

“While purchase application volume was 16% higher than a year ago, we still expect only modest growth in home sales through 2026,” said Mike Fratantoni, chief economist at the MBA, in a statement on December 24.