30-Year Fixed Mortgage Slides to 6.99% as Borrowers Scramble to Lock In Lower Rates Amid Volatile Market
May 16, 2025: Mortgage rates are once again in the spotlight as the average 30-year fixed mortgage dips just below the 7% threshold, offering a glimmer of hope for homebuyers and refinancers who have been navigating a highly unpredictable interest rate environment.
According to new data from Zillow, the national average for a 30-year fixed mortgage stands at 6.99%, marking a slight decline from earlier in the week when rates briefly spiked above 7.3%. However, this small shift could make a significant difference for long-term borrowers.
Today’s Mortgage Rates (May 16, 2025)
| Loan Type | Interest Rate | APR | 1-Week Change |
|---|---|---|---|
| 30-Year Fixed | 6.99% | 7.48% | ▲ +0.03% |
| 15-Year Fixed | 6.12% | 6.44% | ▲ +0.09% |
| 5/1 Adjustable (ARM) | 7.13% | 7.62% | ▼ –0.54% |
| 30-Year FHA | 7.05% | 8.08% | ▲ +0.05% |
| 30-Year VA | 6.55% | 6.77% | ▲ +0.13% |
| Jumbo 30-Year Fixed | 7.72% | 8.14% | ▲ +0.16% |
Why the 6.99% Rate
While a few basis points might seem minor, a 0.25% rate difference can translate into thousands of dollars in interest over the life of a mortgage.
For those waiting for the right moment to buy or refinance, today’s rate drop may present a limited-time opportunity—especially for borrowers with strong credit scores and higher down payments.
What’s Driving the Volatility in Mortgage Rates?
This week’s dip follows a mix of economic developments:
A temporary tariff reduction deal between the U.S. and China initially caused a brief rise in rates earlier in the week.
Ongoing concerns about inflation trends and economic growth are making investors—and the Federal Reserve—hesitant to commit to rate cuts.
Fed officials, including Vice Chair Phillip Jefferson, have emphasized a “wait-and-see” approach before lowering interest rates, citing concerns over tariff-driven inflation.
This delicate balancing act between inflation fears and recession risks continues to influence bond markets—and by extension, mortgage rate movements.
How to Lock in the Best Mortgage Rate Right Now
Here are five actionable strategies for borrowers trying to secure better terms:
Shop Around Aggressively – Don’t go with the first offer. Compare multiple lenders.
Boost Your Credit Score – Even a 20-point increase can unlock a better rate tier.
Increase Your Down Payment – 20% down often leads to lower rates and no PMI.
Compare APR, Not Just Interest Rate – APR accounts for fees, showing true cost.
Consider Shorter Terms or ARMs – 15-year fixed or 5/1 ARM can offer initial savings.
Trending Mortgage Market
- 30-Year Fixed: Back below 7% after peaking at 7.3%.
- 15-Year Fixed: Climbing slightly, now at 6.12%.
- 5-Year ARMs: Biggest decline of the week, now at 7.13%.
- FHA & VA Loans: Still affordable for eligible borrowers, despite minor upticks.
According to data also released by Zillow, average refinance rates are tracking closely with purchase mortgage rates, with the 30-year refinance rate sitting at 6.99% and the 15-year refinance at 6.22%.
What’s Next for Mortgage Rates?
It’s anyone’s guess. The direction of mortgage rates for the rest of 2025 hinges on multiple factors:
- Tariff impact on inflation
- Federal Reserve rate decisions
- Global economic trends and U.S. job market performance
Traders who once expected up to four Fed rate cuts this year now believe just one or two may happen—if any at all. That uncertainty keeps mortgage rates hovering at these elevated levels, with only temporary dips like the one seen today.
Takeaways for May 2025
- The 30-year fixed rate is below 7% — but may not stay there long.
- Adjustable-rate mortgages (ARMs) may be a temporary cost-saving alternative.
- Borrowers should act quickly and get preapproved while rates dip.
- Federal Reserve policy and inflation pressures will dictate where rates go next.