What’s happening?

• The average interest rate for a 30‑year fixed mortgage fell to 6.15% in the week ending Dec. 31 — the lowest level seen this year.
• This is down slightly from 6.18% the week before and much lower than the 6.91% average at the same time in 2024.

Why this matters:

• Rates dropped thanks to calmer markets and lower yields on 10‑year Treasury bonds during the holidays.
• For comparison, mortgage rates began 2025 near 7%, so ending at 6.15% is a positive sign for homebuyers.

Behind the scenes:

• Mortgage rates are tied to the 10‑year Treasury yield, which reflects the overall economy and inflation expectations.
• The Federal Reserve cut its main interest rate three times this year, settling at a range of 3.5%–3.75% by December.

What experts say:

• Sam Khater, Chief Economist at Freddie Mac, notes this is the lowest mortgage rate of 2025 and highlights its positive effect for buyers. 
• Realtor.com Senior Economist Joel Berner points out that there’s little chance the Fed will change rates in January, and stable markets are helping mortgage rates hold steady.

What it means for you:

• Rising mortgage costs and high home prices limited homebuying in 2025.
• But the drop in rates later in the year is already helping pending home sales gain momentum during the typically slow winter season.
• If this trend continues into spring, we could see a stronger housing market in 2026. [realtor.com]