Mortgage Rates Are Nearly 10% Lower Than in May—But Is It Really Time To Lock In?

Mortgage Rates Have Eased Since the Spring

Though the slide has been bumpy, mortgage rates are considerably cheaper than they were about six months ago. The average 30-year fixed rate now sits at 6.50%, compared with 7.15% in mid-May, based on Investopedia’s analysis of daily Zillow rate data. That’s more than a 9% drop from the 2025 peak of this spring, offering modest relief to buyers who have been struggling to afford a new mortgage.

Fed Cuts Haven’t Brought Mortgage Rates Down—Here’s Why

The Federal Reserve’s late-October rate cut grabbed news headlines, but unfortunately for homebuyers, it hasn’t delivered cheaper mortgages. In fact, the average 30-year fixed rate has climbed—from 6.35% on Oct. 28, the day before the Fed’s move, to 6.50% now.

It’s a common assumption that when the Fed lowers its benchmark rate, mortgage rates will drop, too. But the link isn’t direct. The Fed’s rate mainly affects short-term borrowing costs, like credit cards and savings yields—not long-term loans such as 30-year mortgages.

Instead, mortgage rates take their cues from the bond market, especially the 10-year Treasury yield, which reflects investor expectations about inflation, growth, and future Fed policy. When investors expect the economy to stay strong—or worry that inflation could pick back up—bond yields and mortgage rates often rise, even after a Fed cut.

Recent history underscores this point. After the Fed’s September rate cut, mortgage rates climbed rather than fell. And late last year, the Fed lowered rates by a full percentage point between September and December, yet by January the average 30-year mortgage rate had surged nearly 1.25 points higher than before those cuts.

“People associate Fed cuts with mortgage rates, but there is no direct correlation,” said Christopher Carter, vice president and sales manager at Univest Home Loans. “Over time, multiple cuts may accumulate and result in lower rates long-term, but the short term provides no guarantee.”

He added that even seasoned observers can’t reliably forecast where rates will go next. “Not even Jerome Powell of the Fed knows which direction interest rates will go,” Carter said. “The government shutdown is precisely the ‘fog’ he referred to last week.”

Is It Time To Lock In, or Keep Waiting?

For borrowers wondering whether to act now or hold out for lower rates, the outlook is hardly dramatic. Most major forecasts, including Fannie Mae’s, envision 30-year rates hovering in the mid-6% range for the rest of this year and sliding toward the 6% mark by the end of 2026—suggesting modest relief ahead. But the improvement isn’t expected to be dramatic or bring back the ultra-low rates of a few years ago.

“Chances are that interest rates will continue to be locked in a tight range, with neither significant downturn nor upturn,” Carter said. “If someone is in the market to buy, they should take advantage of the rates we have and not hold out for better pricing.”

Even if rates ease a little from here, the difference may not outweigh the risk of missing out on the right home. What matters more is being financially ready—with a solid credit score, steady income, manageable debt, and enough saved for a down payment—so you can move when the right opportunity arrives.

“Each consumer must examine their personal budget and determine whether the recent downturn in rates will benefit them now, or if they should roll the dice on potential lower rates in 2026,” Carter said.

For many buyers, the smart approach is to buy when the timing feels right personally and refinance later if rates decline. That approach balances patience and opportunity—acknowledging that while markets may move unpredictably, personal readiness is something you can control.

How We Track the Best Mortgage Rates

The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.