Good News for Homebuyers: Mortgage Rates Drop in Late 2025

Mortgage rates have dropped to their lowest point in 2025, giving homebuyers a bit of good news as the year comes to a close. The average rate for a 30-year fixed mortgage is now at 6. 15%, down from 6. 18% the previous week. This is a significant drop from the start of the year, when rates were around 7%. The drop in mortgage rates is good news for people looking to buy a home. It means that borrowing costs are lower, which could make homes more affordable. This is important because housing affordability has been a big issue in the economy. The drop in mortgage rates is not directly tied to the Federal Reserve's interest rate decisions. Instead, it follows the 10-year Treasury yield, which was around 4. 14% on Wednesday.Home sales are also on the rise. The National Association of Realtors reported that home sales increased by 3. 3% in November, with gains in all regions of the U. S. This is a sign that the housing market is improving. The economy is also showing signs of growth. The Bureau of Economic Analysis reported that the economy grew at an annualized rate of 4. 3% in the third quarter of 2025. This is higher than economists had expected. Inflation is also coming down. The consumer price index rose by 0. 2% in November, which is lower than expected. However, the job market remains a concern. Employers added 64, 000 jobs in November, and the unemployment rate ticked up to 4. 6%. The Federal Reserve cut rates by 25 basis points for the third straight time at their December meeting. This decision was made against the backdrop of a slowing labor market and elevated inflation.