Mortgage Rates Edge Higher as Homebuyers Await Relief

Mortgage rates ticked up once again, continuing a trend that has defined much of the 2025 housing market. The average 30-year fixed-rate mortgage climbed to 6.89% for the week ending May 29, up from 6.86% the previous week, according to Freddie Mac. This marks the highest average since early February, and reflects persistent economic uncertainties, including elevated bond yields and speculation about the Federal Reserve's next moves.

The 15-year fixed-rate mortgage also rose slightly to 6.03%, maintaining pressure on both first-time and repeat homebuyers. These higher borrowing costs are making monthly mortgage payments significantly steeper, further straining affordability in already expensive housing markets such as California, New York, and parts of the Pacific Northwest.

Despite these challenges, some silver linings are emerging. The elevated interest rates have tempered demand, leading to longer listing times and a rise in available homes across several regions. This has prompted many sellers to adjust their asking prices, particularly in markets that saw overheated growth during the pandemic-era boom. For buyers who are financially prepared and flexible, the current environment may offer more room for negotiation and access to less competitive bidding situations.

According to housing analysts, a meaningful drop in mortgage rates is unlikely in the near term. Economists predict that rates will remain volatile, fluctuating between 6% and 7% for the remainder of the year. Key variables include the federal government’s fiscal health, the possibility of more interest rate hikes, and uncertainty surrounding global trade policy and inflation. Some experts believe the bond market is pricing in risk from increased Treasury issuance and federal debt concerns, which could keep rates elevated even if inflation moderates.

The current environment calls for a strategic approach from buyers. With fewer bidding wars and more time to evaluate options, some buyers are utilizing adjustable-rate mortgages, rate buydowns, and lender concessions to make deals work. Mortgage lenders are also rolling out incentives to attract borrowers, from lower fees to creative financing programs.

While affordability remains a real challenge, particularly for those with limited savings or low credit scores, the shift in market dynamics is offering opportunities for buyers who can act decisively. As always, experts encourage home shoppers to assess their long-term financial plans, lock in rates when favorable, and shop around for the best mortgage terms available.

Sources:

• “Mortgage Interest Rates Today: Mortgage Rates Up Amid Freddie Mac Doubts.” Realtor.com, May 29, 2025.

• “Average Rate on a US 30-Year Mortgage Rises to 6.89%, Its Highest Level Since Early February.” AP News, May 29, 2025.

• “Home Buyers Are Finding a Silver Lining in a Stalled Housing Market—Especially If They're in This Group.” MarketWatch, May 29, 2025.