If you’re considering buying a house before December ends, 2025 may surprise you. Mortgage rates have eased from last year’s highs, housing inventory is on the rise, and price growth is generally down from last year’s breakneck pace. But here’s a twist: New data suggests there’s a one-week window in October — Oct. 12 to 18 — that may offer your best shot at negotiating from strength.

Read more: The best mortgage lenders for first-time home buyers

For many home buyers, mortgage rates are the biggest affordability factor. Thankfully, rates have eased somewhat in 2025 compared to previous years. According to Freddie Mac, 30-year fixed mortgage rates have been hovering in the low-to-mid-6% range — down from the 7.79% high in October of 2023.

Where mortgage rates go next is anyone’s guess, but here’s the backdrop. Mortgage rates tend to follow the 10-year Treasury yield, which has hovered in the 4% to 4.3% range lately.

If inflation cools or the economy slows, Treasury yields could slip lower, and mortgage rates might follow. If not, rates on both could bounce right back up.

That’s why the best advice isn’t to try timing the market to score a more favorable interest rate. Instead, shop aggressively. Get quotes from multiple mortgage lenders on the same day, and compare the annual percentage rate (APR) instead of just the advertised rate. Ask about programs like a rate float-down option, which lets you capture a lower rate if rates decrease after you lock in a rate.

To put the numbers in perspective: On a $350,000 mortgage, the difference between 6.5% and 7% is about $117 per month on a 30-year fixed-rate mortgage. That may not seem like a lot, but over a 30-year term, it adds up to more than $40,000 in interest. Locking in at the right moment could save you the cost of a fancy new car.

One of the main issues for buyers in the last few years? The lack of listings. In recent years, seller have stayed put because they didn’t want to give up their low mortgage rates and the affordable monthly payments that accompanied them — a phenomenon called the “rate lock effect.”

Today, that gridlock shows signs of easing.

The National Association of Realtors reported that existing home sales hit a seasonally-adjusted annual pace of 4 million in August 2025. More importantly, inventory hit 1.53 million homes — an 11.7% increase from August 2024. That works out to about 4.6 months' supply, up from 4.2 months a year ago. More supply means buyers have a bit more leverage than they did even 12 months back.

Meanwhile, the new home market is practically brimming. Builders sold at an annual pace of 652,000 in July and had 499,000 homes for sale — equal to 9.2 months’ supply. That’s a deep backlog compared to the 7.5 months’ supply of July 2024, and builders are motivated to move homes. Translation: You’re more likely to see builder incentives like closing cost credits, interest rate buydowns, or even upgrades thrown in, giving you more bang for your buck at the closing table.

It’s a far cry from the days when buyers were waiving inspections just to win a bidding war. Now, buyers can take their time, negotiate repairs, or push for help with closing costs — especially if a property has been on the market for some time.

If you’ve been holding off on buying until a housing market crash, you’ll probably have a long wait ahead. Prices haven’t fallen much nationally, but the pace of growth is much slower.

The Federal Housing Finance Agency (FHFA) reported that annual home prices fell by 0.1% in July. Case-Shiller’s national housing price index was even softer, showing a 1.7% gain in July 2025, down from 1.9% in June.

National numbers only tell part of the story, however. Buyers in some cities may encounter flat prices or slight dips, while those in other cities could experience bidding wars. The key is to look local. Your real estate agent can pull real estate comps and price trends for your preferred neighborhood, and those details matter more than any national index when it comes time for an appraisal.

For example, let’s say you’re looking at a $450,000 home in Phoenix. If comparable homes in that ZIP code are selling for $425,000, that’s your leverage. National data might indicate that prices are still rising, but a neighborhood snapshot will help determine if you can negotiate the list price down.

The rent line is worth watching for renters debating whether to keep renting or buy a home. According to the Bureau of Labor Statistics, both the rent of primary residence and something called "owners' equivalent rent" rose 0.3% from June to July 2025.

That second term — owner’s equivalent rent — might sound like jargon, but it’s important. It’s the way government statisticians estimate what homeowners would have to pay if they rented their home. In other words, it’s a stand-in for the housing cost of the two-thirds of Americans who own rather than rent. Currently, the national owner’s equivalent rent is running about 4% higher than it was a year ago.

What does this mean for you? Simply put, shelter costs are still rising faster than overall inflation. If your landlord bumps your rent up every year, you’re feeling this number for sure. For would-be buyers, ever-increasing rents can make a fixed mortgage payment look appealing, even if today’s rates don’t feel like a steal, because it locks in a big part of your monthly budget.

Here’s an example: If you’re paying $1,500 a month in rent, a 4.1% increase adds about $60 to your monthly payment. Over one year, that’s $720 gone without building any wealth through homeownership. Multiply that over several years, and the case for buying — even in a higher interest rate environment — could start to look stronger.

Dig deeper: How to use home equity to build wealth

Given all the market shifts outlined above, there’s one week in particular that could stand out for homebuyers. According to new data from Realtor.com, the week of Oct. 12 to 18 may offer the best mix of affordability, selection, and negotiating power in 2025, making it the best time of year to buy a house in the U.S.

The analysis examined more than a decade of housing data and found that, on average, this mid-October stretch consistently yields more listings, fewer competing buyers, and slightly softer prices. If you’ve been waiting for the right window, this might be it. Here’s why.

Realtor.com expects active listings during that week to be about 32.6% higher than at the beginning of 2025. That’s a meaningful jump after years of tight inventory, giving buyers more breathing room and the ability to compare instead of compromise.

As summer demand cools, buyer traffic usually dips — and this year is no exception. During the Oct. 12 to 18 window, listings tend to get about 30.6% fewer views per property than at peak buying season. That means fewer bidding wars and more space to negotiate for a lower home price or closing costs.

Sellers tend to adjust expectations as fall sets in. Realtor.com’s data shows that listing prices during the “best week” usually run about 3.4% below the year’s seasonal highs. On a $439,000 home, that’s roughly $15,000 in potential savings — money that can offset closing costs or future maintenance.

Mid-October also brings a higher share of price reductions (about 5.5% of listings), and homes sit on the market roughly two weeks longer than in the busiest times of year. Sellers who haven’t found a buyer by then are often more open to seller concessions, repair credits, or helping with mortgage rate buydowns.

Not every market will line up perfectly with the national average. Realtor.com found that in 45 of the top 50 metro areas, the “best week” to buy falls within a month of the Oct. 12 to 18 window. Some Northeastern, Midwestern, and Florida markets peak a bit earlier or later. The takeaway? Use your local trends to fine-tune the timing, but circle mid-October 2025 on your calendar if you’re ready to move.

If you can have your financing lined up and your home search well underway before that week, you’ll be positioned to act fast while others are still hesitating, which could make all the difference in landing the right home at the right price.

Dig deeper: When will housing prices drop?

It depends less on the calendar year and more on your personal finances. Rates have stayed under 7% for most of this year, inventory is improving, and price growth has cooled — all positives for buyers in 2025. But a “good” time to buy a house depends on whether you can comfortably afford the payment, have a stable income, and plan to stay put for a while. If you can check these boxes, 2025 offers opportunities that weren’t around a few years ago in the frenzied pandemic market.

That depends on how ready you are — not just on the market. In late 2025, buyers will have more inventory, easing competition, and slowing price growth, which adds up to better leverage. Realtor.com even projects mid-October 2025 as the best buying window of the year. By 2026, conditions could shift again if rates or prices rise. If your finances are solid and you find the right home, waiting a year might cost more than it saves.

Rates have already slipped from their 2024 highs, but no one can promise they’ll keep falling. According to Freddie Mac, rates are in the low-to-mid-6% range, down from earlier peaks but still above pre-pandemic levels. If inflation cools and the Fed starts easing, rates could drift lower, yet global events or higher Treasury yields could push them back up. In short, hope for lower rates, but plan your budget around where they are today.

Laura Grace Tarpley edited this article.

With the Federal Reserve's first interest rate cut of the year on Sept. 17 — and the expectation of two more by the end of the year — where are mortgage rates heading long-term? Mortgage interest rates are determined by many factors, not just the fed funds rate. A primary factor is the 10-year Treasury yield. At Yahoo Finance, we’ve designed a five-year mortgage rate forecast, built on a 10-year yield correlation, that provides some insight.

Read more: The best mortgage lenders right now

Mortgage rate forecasts might best be derived from 10-year Treasury note trends. While the two rates often track in the same direction, there is a spread between them that we will account for below.

First, let's understand where Treasury yields are headed in the next five years. We'll combine human analysis with data pulled from artificial intelligence to put together a prediction.

Michael Wolf is a global economist at Deloitte Touche Tohmatsu Ltd. In June, the Deloitte Global Economics Research Center issued an updated U.S. economic forecast in which Wolf laid out the firm's Treasury yield expectations over the next five years.

"We expect the 10-year Treasury yield to hover near 4.5% for the remainder of this year, despite a softening in economic data and a 50-basis-point cut from the Fed in the fourth quarter of 2025," he wrote. "The 10-year Treasury yield begins to decline slowly in 2026, falling to 4.1% by 2027 and remaining there through the end of 2029."

Let's chart that forecast.

That's not much movement. Goldman Sachs analysts agree, saying the 10-year Treasury will remain near 4.1% through 2027.

Meanwhile, the Congressional Budget Office (CBO) forecasts the Treasury yield to be 4.1% by the end of 2025, down to 4% in 2026 and remaining near 3.9% through 2029.

Dig deeper: Why are mortgage rates increasing after the Federal Reserve rate cut?

As we mentioned up top, the 10-year Treasury and 30-year fixed mortgage rates are separated by a spread. That difference between the two has been on either side of 2.5 percentage points in recent years. That's a significant change when compared to the spread from 2010 to 2020 when it was under two percentage points — and often near 1.5.

Using a 2.5 percentage point spread, here's an example of how Treasurys and mortgage rates compare:

10-year Treasury rate = 4%

Spread = 2.5 percentage points

Mortgage rates = 6.5%

Here's a recent example: As of Sept. 24, the 10-year Treasury yield was 4.16%, and the 30-year fixed mortgage rate was 6.3%. The spread was 6.3 - 4.16 = 2.14 percentage points.

The latest version of artificial intelligence, GPT-5, suggested using a spread of 2.1 to 2.3 percentage points. Here is its rationale:

Historical standard (2010s): ~1.7 pp

Recent years (2022 to 2025): ~2.6 pp

Estimated 5-year average spread: ~2.1 to 2.3 percentage points

Using these spread estimates, we can now complete our five-year mortgage rate forecast.

Read more: How to get the lowest mortgage rate possible

Using the Treasury forecast from above, we add the spread between the bond market and 30-year fixed mortgage rates to compile a five-year forecast:

Learn more: When will mortgage rates go back down to 6%?

Of course, these are long-range estimates based on historical norms and broad expectations. All of these numbers could be thrown out the window if any of the following happens:

10-year Treasurys outperform or underperform the forecast. For example, yields could crash in a severe economic setback, such as a recession.

The spread between Treasurys and mortgage rates narrows — or dramatically expands.

Monetary policy, as driven by the Federal Reserve, substantially changes.

There is no forecast that predicts a 3% mortgage rate in the next five years. However, who saw such low home loan rates on the horizon in 2007 when rates were about where they are now? Things like the Great Recession and a global pandemic are rarely on the radar, and such drastic events are what it takes to move mortgage rates into the cellar.

The analysis above predicts 2027 mortgage rates to be around 6.2% to 6.4%.

Based on the estimates above, mortgage rates are not expected to drop significantly in the next five years. However, a recession or other unknown disruption to the economy (such as a financial collapse or pandemic) could change the outlook.

If you are considering an adjustable-rate mortgage with an initial fixed-rate period, you'll first want to consider how long you'll actually remain in the house you are financing. Then the long-term mortgage rate forecasting begins. The best approach is probably to select the initial term that best suits your current budget.

Laura Grace Tarpley edited this article.

The median sales price of homes in the U.S. has reached over $400,000. So, if you want to take out a conventional loan and make a 20% down payment to avoid private mortgage insurance, you’ll need to put down more than $80,000.

For many Americans, saving tens of thousands of dollars for a down payment can take years. Fortunately, you don’t need a 20% down payment for a mortgage — and you might not need any down payment at all. A zero-down mortgage can help expedite your journey to homeownership.

In this article:

What is a zero-down mortgage?

Types of zero-down mortgage loans

Pros and cons

Alternatives

Are no-down-payment home loans right for you?

FAQs

A zero-down mortgage is exactly what it sounds like: a mortgage loan that requires no down payment. In other words, it allows you to finance 100% of a home’s purchase price. Not everyone qualifies for a zero-down home loan, but for those who do, it’s a great way to become a homeowner without spending years saving just so you can get your foot in the door.

Read more: The best mortgage lenders for low/no down payments

VA loans and USDA loans are two mortgage options that allow you to buy a home without putting any money down.

VA loans are insured by the U.S. Department of Veterans Affairs and are available to eligible active-duty service members, military veterans, past or present members of the National Guard or Reserve, or surviving spouses of deceased veterans. To qualify for a zero-down VA loan, you must have a Certificate of Eligibility from the VA.

While the VA has no minimum credit score requirement, most VA mortgage lenders like to see a credit score of at least 620. You’ll also want to keep your debt-to-income ratio (DTI) under 50% to maximize your chances of loan approval.

Learn more: Is now a good time to get a VA loan?

A USDA loan is backed by the United States Department of Agriculture and is specifically designed for borrowers with low-to-moderate incomes who want to buy homes in rural areas. Though these home loans don't require a down payment, they’re pretty strict about your household income. This income limit depends on the location of the property and your household size. Check the income limits for the county where you plan to buy your home to see if you’re eligible.

Besides meeting financial requirements like income limits, your home must be located in a rural or suburban area for you to qualify. Check out the USDA’s map of eligible areas to determine if your home is eligible.

The 2025 USDA loan limit in most areas is $419,300, but it can be higher in more expensive counties. For example, the limit is $970,800 in Santa Cruz County, Calif.

Though zero-down home loans lower the barriers to homeownership, they come with a few downsides that could be deal-breakers. Make sure you’re aware of these pros and cons before making a decision.

Buy a house with $0 down: Since the federal government backs USDA and VA loans, they allow lenders to be more lenient with down payment requirements. This means you get to keep more cash on hand.

No private mortgage insurance: Zero-down mortgages do not come with private mortgage insurance (PMI), which conventional loans require if you put down less than 20%. PMI can be expensive and add to the cost of homeownership.

You can become a homeowner sooner: With the median home price in the U.S. being over $400,000, saving up for a down payment can take years. Zero-down home loans make it possible to buy a home sooner.

You’ll pay fees. VA loans come with a funding fee ranging from 1.25% to 3.30% of the amount borrowed, which you’ll pay at closing. USDA loans charge a guarantee fee of 1% of the loan amount at closing, then an annual guarantee fee of 0.35% of the remaining balance.

You’ll take on more debt. Financing your home’s entire purchase price means your mortgage balance will be higher. This will lead to higher monthly payments and more interest paid over the life of the loan.

You’ll have little to no equity in the home. Without making a down payment, you’re essentially starting with no equity. This can be risky because if the market plummets shortly after you buy the house, your equity could fall below 0% since you didn't have much in the first place. This puts you in the tricky situation of being underwater on your mortgage.

Zero-down mortgages aren’t your only option when you have little saved for a down payment. Here are some other loan types to consider.

Certain conventional loan programs only require you to come up with a 3% down payment, including the following:

Fannie Mae’s HomeReady program. Fannie Mae’s HomeReady mortgage program is a great option for lower-income buyers. To qualify for this 3% down conventional loan, your income cannot exceed 80% of the area’s median income, and your credit score must be at least 620.

Conventional 97. This 3% down conventional mortgage backed by Fannie Mae has no income limits and is designed for first-time home buyers.

Freddie Mac’s Home Possible® program. Freddie Mac’s Home Possible® program is similar to Fannie Mae’s HomeReady program but requires a credit score of at least 660.

FHA loans are insured by the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (HUD). Since the FHA backs them, these types of mortgages are less risky for lenders to issue and, as a result, come with more lenient borrower eligibility criteria.

With an FHA loan, you only need to put 3.5% down if your credit score is 580 or higher. And if your score falls between the 500 to 579 range, you’ll need to put 10% down. However, one downside you should be aware of is that FHA loans come with mortgage insurance premiums (MIPs) that typically last for the life of your loan.

A few mortgage lenders have started offering mortgage loans that only require 1% down down payments. Remember how many conventional loans only require 3% down payments? Well, in this case, you cover 1% of the down payment, and the lender covers the other 2% by giving you a grant.

Each lender will have its own requirements surrounding income limits and credit scores to qualify for these programs. If you’re interested in a 1% down mortgage, check out Guild Mortgage, Rate (previously Guaranteed Rate), and Rocket Mortgage.

Many states and counties offer home buyer incentive programs that provide down payment assistance, low-interest-rate home loans, and more. For example, The Massachusetts Housing Finance Agency, or MassHousing, offers up to $25,000 in down payment assistance to eligible borrowers.

If you’re looking for down payment assistance in Texas, consider the My First Texas Home program. This program provides up to 5% of the mortgage amount in down payment and closing cost assistance.

A zero-down loan can be a great way to help you break into the housing market if you are eligible and have little to no money saved for a down payment.

However, you’ll likely face higher monthly payments and pay more interest over the life of the loan since you’re financing the full purchase price. Plus, starting with no equity can be risky if home values fluctuate. Talk to a financial adviser or mortgage broker who can help you weigh your options and find the best fit for your needs.

VA loans and USDA loans typically do not require down payments.

The USDA doesn’t set a minimum credit score requirement, but most lenders require a score of at least 640. VA lenders also have their own minimum requirements for VA loans, and most require a score of at least 620. However, there are lenders out there that will accept lower scores.

Unfortunately, no. Conventional loans require at least 3% down. If you’re looking for a no-down-payment mortgage, consider USDA or VA loans.

This article was edited by Laura Grace Tarpley.

We've seen it before, but it’s still jarring. The Federal Reserve lowers short-term interest rates, and mortgage rates inexplicably increase. It happened last September and again with the first Fed cut of 2025 last week. So, what's going on?

Read more: How the president can affect mortgage rates

First of all, the Federal Reserve and mortgage rates are working on two ends of a timeline. The Fed steers short-term interest rates, and mortgage rates are influenced by long-term bonds.

When the Fed cuts its federal funds rate, as it did by a quarter-point on Sept. 17, here's what happens:

The fed funds rate falls. That's the interest rate charged to banks for overnight loans from other banks.

The prime rate falls. That is the interest rate financial institutions charge to their most-favored customers.

Savings account rates fall, as do interest paid on certificates of deposit (CDs), and on checking, brokerage, and cash management accounts.

Loan rates fall. That can include personal loans, home equity loans, and home equity lines of credit (HELOCs).

A little later, other short-term rates move lower, such as credit card interest rates.

Dig deeper: How the Fed rate cut affects your bank accounts, loans, credit cards, and investments

Mortgage rates are longer-term debt, as anyone with a 30-year home loan knows. That's a very long debt runway. The fixed rate you pay is evergreen, with a margin built in to last through many interest rate cycles.

That means it's priced to a longer-term benchmark, such as the 10-year Treasury.

The bond market generally reacts to longer-term events, such as inflation, employment, and macroeconomic trends.

Sometimes, mortgage rates fall after a Fed rate cut. Sometimes,​​ they don't. Many times, they'll decline in expectation of falling short-term interest rates in the weeks leading up to a Fed meeting. Then, occasionally, they bounce back up.

In fact, weekly 30-year fixed mortgage rates generally began dropping on May 29, 2025, from 6.89% all the way down to 6.26% by Sept. 18. The Fed cut rates on Sept. 17, and rates bounced up to 6.30% on Sept. 25.

What will it take for mortgage rates to continue a downward trend?

"With rates drifting higher following the Fed’s rate cut, softer labor or inflation data will be needed to reignite hopes for lower yields and mortgage rates," loanDepot’s head economist Jeff DerGurahian said in an analysis.

It's not the Fed, it's the economy.

Don't pin your home-buying hopes on short-term events, day-to-day trends, and all the other things out of your control. Once you have your down payment in hand, a home-buying budget ready to go, and an idea of how much house you can afford, make a real-life plan to buy a house.

Know the mortgage interest rate range you can handle and have your list of potential mortgage lenders lined up.

Then don't look back.

Laura Grace Tarpley edited this article.