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US Mortgage Rates Slide to Three-Month Low, Refinance Activity Jumps

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Updated Jul 3, 2025, 04:59 PM

US mortgage costs fell for a second straight week, reaching their lowest levels since early April. Freddie Mac reported the average 30-year fixed rate at 6.67% for the week ended July 3, down from 6.77% a week earlier. Separate data from the Mortgage Bankers Association show the contract rate on 30-year conforming loans eased to 6.79% in the week ended June 27, while the 15-year rate slipped to 6.06%.

The drop in borrowing costs is reviving refinancing activity. The MBA’s Market Composite Index of mortgage applications rose 2.7% from the prior week, driven by a 7% jump in the Refinance Index. Refinance demand now stands 40% higher than the same period a year ago and accounts for 40.1% of all mortgage applications, the highest share since mid-April. Conventional refinance applications increased 10%, and applications backed by the Department of Veterans Affairs surged 22%.

Home-purchase lending remains subdued. Applications to buy homes were roughly flat on the week and remain constrained by high prices and economic uncertainty, the MBA said. Analysts note that buyers appear to be waiting for a more pronounced decline in rates before re-entering the market.

Mortgage rates track movements in Treasury yields, which have retreated on expectations that the Federal Reserve could begin trimming policy rates as inflation and hiring cool. Even after the latest decline, however, borrowing costs remain well above pre-pandemic norms, suggesting the housing market may not see a broad rebound until financing becomes materially cheaper.

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