Mortgage interest rates today saw very little movement. According to Zillow, the average 30-year fixed rate stayed flat at 6.69%. Meanwhile, the 15-year mortgage decreased by three basis points to 5.89%.

With the Federal Reserve voting today to keep the federal funds rate steady, and the June jobs report showing employment and hiring on the decline, mortgage rates are not expected to decrease this year. So if you are looking to buy a house, and it makes sense given your personal circumstances, now is as good a time as any.

Read more: Divided Fed holds rates steady, again defying Trump

Here are the current mortgage rates, according to the latest Zillow data:

30-year fixed: 6.69%

20-year fixed: 6.62%

15-year fixed: 5.89%

5/1 ARM: 7.27%

7/1 ARM: 7.39%

30-year VA: 6.36%

15-year VA: 5.73%

5/1 VA: 6.22%

Remember, these are the national averages and rounded to the nearest hundredth.

Learn more: Here's how mortgage rates are determined

These are today's mortgage refinance rates, according to the latest Zillow data:

30-year fixed: 6.65%

20-year fixed: 6.37%

15-year fixed: 5.94%

5/1 ARM: 7.35%

7/1 ARM: 7.41%

30-year VA: 6.22%

15-year VA: 5.99%

5/1 VA: 6.19%

Again, the numbers provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than rates when you buy a house, although that's not always the case.

Use the mortgage calculator below to see how various interest rates and loan amounts will affect your monthly payments. It also shows how the term length plays into things.

To dive deeper, use the Yahoo Finance mortgage calculator, which includes homeowners insurance and property taxes in your monthly payment estimate. You even have the option to enter costs for private mortgage insurance (PMI) and homeowners' association dues if those apply to you. These details result in a more accurate monthly payment estimate than if you simply calculated your mortgage principal and interest.

There are two main advantages to a 30-year fixed mortgage: Your payments are lower, and your monthly payments are predictable.

A 30-year fixed-rate mortgage has relatively low monthly payments because you’re spreading your repayment out over a longer period of time than with, say, a 15-year mortgage. Your payments are predictable because, unlike with an adjustable-rate mortgage (ARM), your rate isn’t going to change from year to year. Most years, the only things that might affect your monthly payment are any changes to your homeowners insurance or property taxes.

The main disadvantage to 30-year fixed mortgage rates is mortgage interest — both in the short and long term.

A 30-year fixed term comes with a higher rate than a shorter fixed term, and it’s higher than the intro rate to a 30-year ARM. The higher your rate, the higher your monthly payment. You’ll also pay much more in interest over the life of your loan due to both the higher rate and the longer term.

The pros and cons of 15-year fixed mortgage rates are basically swapped from the 30-year rates. Yes, your monthly payments will still be predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention, you’ll pay off your mortgage 15 years sooner. So you’ll save potentially hundreds of thousands of dollars in interest over the course of your loan.

However, because you’re paying off the same amount in half the time, your monthly payments will be higher than if you choose a 30-year term.

Dig deeper: 15-year vs. 30-year mortgages

Adjustable-rate mortgages lock in your rate for a predetermined amount of time, then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once per year for the remaining 25 years.

The main advantage is that the introductory rate is usually lower than what you’ll get with a 30-year fixed rate, so your monthly payments will be lower. (Current average rates don't reflect this, though — fixed rates are actually lower. Talk to your lender before deciding between a fixed or adjustable rate.)

With an ARM, you have no idea what mortgage rates will be like once the intro-rate period ends, so you risk your rate increasing later. This could ultimately end up costing more, and your monthly payments are unpredictable from year to year.

But if you plan to move before the intro-rate period is over, you could reap the benefits of a low rate without risking a rate increase down the road.

Learn more: Adjustable-rate vs. fixed-rate mortgage

The national average 30-year mortgage rate is 6.69% right now, according to Zillow. But keep in mind that averages can vary depending on where you live. For example, if you're buying in a city with a high cost of living, rates could be even higher.

Mortgage rates will likely remain in a tight range over the next few months. There are many questions regarding the economy, inflation, and the job market. Don't look for big moves in interest rates unless bad economic news develops.

With the recent Fed vote, mortgage rates are not set to drop any time soon. In fact, according to Zillow data, rates have actually increased slightly compared to where they were one year ago.

In many ways, securing a low mortgage refinance rate is similar to when you bought your home. Try to improve your credit score and lower your debt-to-income ratio (DTI). Refinancing into a shorter term will also land you a lower rate, though your monthly mortgage payments will be higher.

All the information about mortgage interest rates and home prices may be buzzing around your head, but those are not the only considerations to help you answer the important question: When should I buy a house? Real estate market conditions matter, but so do your life stage and personal finances.

Buying a home is both an emotional decision and a financial choice, especially for first-time home buyers. There’s no one-size-fits-all answer to tell you when to buy a house, but there are some indications that can help you make this critical choice.

Dig deeper: Is now a good time to buy a house?

In this article:

Signs you should buy a house

Signs you shouldn’t buy a house yet

FAQs

While you should pay attention to local housing market trends such as interest rates, home prices, and how fast homes sell, some signals suggest it may be the right time to buy a home.

Related: Should you lock in a mortgage rate now?

If you’re ready to settle into a town, neighborhood, and home that you’ll stay in for several years, that’s one of the best indications that you should buy a house. A house ties you to a location in a way that a rental home doesn’t because you would need to sell the property or rent it to tenants if you decided to move. That can be more costly and complex than ending a lease.

You can only see so far into the future. But if you have a job that provides consistent income and expect to stay there for the next several years, that security can help you qualify for a mortgage loan. More importantly, you can feel confident about your financial future.

As a homeowner, your monthly housing payment will include principal, interest, taxes, and insurance (PITI). In addition, you may need to pay homeowner association dues and have a budget for home maintenance and repairs. You can use an online calculator or ask a real estate agent or mortgage lender to estimate the payments on homes in your area.

“Comfortably afford” means you’ve considered your complete budget and lifestyle choices that you may not want to change, such as travel or consistent contributions to your retirement fund.

If your rent is going up, your landlord is selling your rental home, your family size is changing, or you’re relocating, this may be the time to think about buying instead of renting again. If you can afford to buy and intend to stay in your next home long-term, this may be an excellent time to look for a permanent residence.

Depending on the mortgage program you choose, you may need 0%, 3%, 3.5%, or even 10% of the home price for a down payment. In addition, closing costs range from 2% to 6% of the home price. If you buy a $400,000 home, you will need at least $12,000 for a conventional loan with 3% down. If you choose to make a down payment of 20%, you will need $80,000. Then, you’ll need roughly $8,000 to $24,000 for closing costs.

You’ll also need savings for moving costs, an emergency fund of three to six months of expenses, and savings to cover home repairs. Some experts suggest setting aside 1% to 2% of the home price annually for repairs and maintenance, which would be $4,000 to $8,000 on a $400,000 home.

Learn more: How much house can I afford? Use our home affordability calculator.

Borrowers typically need a credit score of at least 620 to qualify for a mortgage, although some loan programs allow scores as low as 580. (An FHA loan will even allow 500 if you have a 10% down payment.) However, a credit score of 740 or higher is generally needed to qualify for the lowest mortgage rates. A high credit score can also indicate that you manage your finances well — another sign you may be ready to buy a home.

Dig deeper: What's the best age to buy your first house?

Market conditions in your area may influence your answer to the question, “Should I buy a house?” However, your personal finances and life stage also play a part in your choice of when to buy a home. There are several signs that this may not be the right time to buy a house for you.

If you’re in a stage of life when you want the flexibility to switch careers, relocate, change your family configuration, or move in with a partner, this may not be the best time to commit to homeownership.

Not every home requires a lot of work, but homeowners are responsible for routine maintenance. In some cases, a newly built home, a condo, or a townhouse can ease the burden of homeownership, but even then, you’ll have a few tasks to handle. Calling a landlord or apartment maintenance to take care of things may fit your lifestyle better. However, this may not be a big problem if you can afford to pay professionals to make repairs or if you have people in your life who are willing to help.

Buying a house is a big financial commitment, so it’s best not to take on the burden of a mortgage payment until your debt is under control. Depending on your debt situation, you may have a low credit score or a high debt-to-income ratio (DTI), which compares the minimum payment on all monthly debt with your gross monthly income. Either of those situations can make it hard to qualify for a mortgage.

If there’s a chance you might lose your job or be forced to relocate to stay employed, you don’t want to be tied to a house that you’ll need to sell quickly. It’s better to wait until you’re confident your employment is steady before committing to a long-term home.

New homeowners are often surprised by the higher cost of owning than renting. Utility bills, regular maintenance, landscaping, and repairs often cost more than anticipated. If your budget is already tight, it may be best to wait until you have reduced other expenses or increased your income to buy a home.

Learn more: How to save for a house

Maybe you have the cash, steady income, and desire to buy, but the type of house you want isn’t in your price range or available in your preferred neighborhood. While nearly every home buyer needs to compromise on something, you may want to wait until you can buy something you love instead of committing to years in a home you ultimately don’t want.

Read more: What it means to be house poor and how to avoid it

You can always calculate the cost of rent versus owning in your community, but generally, homeownership provides financial security and contributes to household wealth. The median household wealth of homeowners in 2022 was $396,200, nearly 40 times the median household wealth of $10,400 for renters, according to the Federal Reserve.

While the benefit of buying a home as soon as possible is that you can build equity over time as you pay down the mortgage, you may not be emotionally ready to buy. For example, if you want the flexibility to move within your city or relocate, you may want to wait to buy a house.

Timing the housing market can be difficult, even for expert real estate investors. While you should consult a real estate agent, a mortgage lender, or a financial adviser to avoid buying when home values may decline, you should base your decision about when to buy a house more on personal circumstances rather than the economy.

This article was edited by Laura Grace Tarpley.

When it comes to buying and owning a house, two significant variables will impact how much you spend on your mortgage: home prices and interest rates. While house prices are the more obvious factor determining how much you pay over the life of the loan, interest rates will also play a crucial role in the total cost of your mortgage.

This leads to an essential question for home buyers: Is it better to buy a less expensive house with a higher interest rate or a more expensive house with a lower interest rate?

Here’s what you need to know about the relationship between interest rates and house prices and how they affect your mortgage payments.

Dig deeper: When will mortgage rates decrease?

In this article:

The relationship between house prices and interest rates

How interest rates and house prices affect affordability

Down payment

Monthly payments

Lifetime loan costs

Breaking it down

The other side of the home price/interest rate equation

FAQs

Deciding whether to prioritize a low home price or mortgage interest rate is more than just a simple mathematical question. That’s because there tends to be an inverse correlation between home prices and interest rates in the housing market. Specifically, home prices tend to be lower when interest rates are higher, and home prices typically go up when interest rates are low.

This relationship involves the economic principle of supply and demand. In this case, interest rates can affect the demand for homes in the housing market. Lower interest rates generally mean increased demand for houses, leading to home sellers setting higher home prices. On the other hand, higher interest rates can reduce the demand for homes, so home sellers lower their prices to entice potential buyers, and home values decline.

Learn more: When will housing prices drop?

Calculating the affordability of a home depends on three different aspects of the home sale: the down payment, the monthly mortgage payment, and the lifetime cost of the home loan. Here’s how interest rates versus house prices affect each of those factors.

Conventional loans require a down payment. Home buyers who want to avoid paying for private mortgage insurance (PMI) must put down at least 20%, although mortgage lenders may accept as little as 3% down on conventional loans. The typical down payment in Q4 2024 was 16.3% (a median of $63,188), according to a study by Redfin.

If you purchase a home with a lower price but a higher interest rate, your down payment can be more affordable. For example, let’s say you purchase a $220,000 home while interest rates are high. You can put down a 20% down payment, or $44,000, and get a 30-year fixed-rate mortgage with a 7.3% interest rate.

But if you waited for interest rates to fall before buying a home, the same house may now be selling for $300,000. Although 30-year mortgages may now have interest rates as low as 6% because you waited, you would need $60,000 to make a 20% down payment and avoid PMI.

Your monthly mortgage payment depends on several factors, including how much you borrow and the interest rate on your loan. For a $220,000 home purchase with a $44,000 down payment and 7.3% interest rate, your monthly payment toward the mortgage principal and interest will be approximately $1,207.

If you wait until rates fall to 6% and purchase the home for $300,000, you must find another $16,000 to make a 20% down payment of $60,000. If you can afford the higher down payment, your monthly mortgage payment will be approximately $1,439, which means you’ll pay about $230 more per month than if you’d purchased the home at a lower price and higher interest rate.

However, let’s assume you can’t afford the $60,000 down payment. If you buy the home at $300,000 with a $44,000 down payment, you will be on the hook for PMI until you have built up at least 20% equity in the home.

If you pay 1.5% in PMI, your monthly mortgage payments (principal + interest + PMI) will be approximately $2,175 for the first four-and-a-half years. At that point, you will have built up 20% equity and are no longer responsible for PMI. Then, your monthly payment will drop to $1,855 for the life of the loan.

In this case, waiting until the rates decrease will result in a monthly payment that’s $648 to $968 higher.

Note: These monthly mortgage payments do not include homeowners insurance, property tax, or homeowner’s association (HOA) dues. To get even more accurate numbers, use Yahoo Finance’s mortgage calculator.

You may feel the pain of the down payment and monthly payments in the short term, but the lifetime costs of your loan are also an important factor in your housing affordability. This is where interest rates can make a big difference.

For example, the $220,000 home with a $44,000 down payment and a 7.3% interest rate on a 30-year mortgage will cost $258,378 in interest over the life of the loan — on top of the amount you borrow.

But waiting until rates fall to 6% and the home price rises to $300,000 will change your lifetime costs. If you put down $44,000 on a 30-year mortgage and must pay PMI, your lifetime loan costs are approximately $314,107 — on top of that original $300,000 — broken down into $17,507 in PMI costs and $296,600 in lifetime interest paid.

In this case, you would have been better off buying the house at a lower price with a higher interest rate, saving over $55,000 over three decades.

But what if you can afford the 20% down payment of $60,000 and avoid PMI? On that 30-year home loan with a 6% interest rate, your lifetime interest paid is $278,012 with $0 paid in PMI. You will save roughly $18,500 in interest over the life of the loan than if you’d made a lower down payment, plus the $17,507 saved by skipping the PMI.

Interest rates, home price, down payment, PMI — all individual factors that add up to the total cost of owning your home. It can get confusing, so let's break it down with a chart.

Let’s look at the three examples we’ve been discussing:

$220,000 house with a 7.3% rate and 20% down payment ($44,000)

$300,000 house with a 6% rate and 20% down payment ($60,000)

$300,000 house with a 6% rate and 14.7% down payment ($44,000)

In this case, buying the less expensive home with the higher interest rate saves you money on your down payment, PMI, monthly mortgage payments, and total cost. But keep in mind that the numbers will depend on your exact interest rate and house price. The lower house price won’t always beat the lower rate, especially if you don’t have a 20% down payment in either scenario.

Learn more: Should you buy a house in a recession?

Remember when we said that home prices typically drop when interest rates rise? Well, the real estate market of the past few years has bucked that trend.

From Q1 2020 to Q1 2025, the average sales price for a single-family home in the U.S. increased from $383,000 to $503,800, according to data from the Federal Reserve Bank of St. Louis. More current data from Redfin shows the median price for single-family homes sitting at $440,913 as of May 2025 — a 0.7% increase compared to 2024. During this same time, interest rates have also consistently been on the rise — from sub-3% in late 2020 and early 2021 to the high 6% range as of June 2025.

So, if you’re considering holding off on a purchase until rates or home prices dip, that strategy could seriously backfire, said Casey Gaddy, a real estate agent based in Philadelphia, via email.

“The reality is, nobody can quite forecast where the market’s ultimately headed,” said Gaddy. “That’s why I counsel buyers to work with their agent and lender on strategies that work today.”

Instead of taking a risk at forecasting the market and ending up on the wrong side of the gamble, Gaddy recommended that buyers work with their real estate agent and mortgage lender on strategies that fit the current market. He offers a seller-paid rate buydown as an example.

“Instead of negotiating $10,000 off the purchase price of that $300,000 home — which saves you $10,000 — ask the seller to put that $10,000 toward buying down your interest rate,” said Gaddy. With his example, lowering your interest rate from 6.5% to 5.5% through a rate buydown with discount points could save you as much as $70,000 over 30 years.

For buyers who know they won’t be making their current purchase their forever home, Gaddy suggested asking about a 3-2-1 rate buydown. “This lets you enjoy a much lower rate the first few years — saving you thousands up front — without paying for a long-term rate you won’t use,” Gaddy said.

Read more: Average mortgage rates by state

In typical housing markets, interest rates and housing prices have an inverse relationship. When housing prices increase, it’s common for interest rates to fall and vice versa. However, the 2025 housing market suffers from a tight supply where buyers outnumber homes for sale. This creates an environment where home prices continue to rise and interest rates remain steady, creating challenges for buyers — especially first-time buyers seeking affordable homes.

Historically, home prices increase when interest rates drop as more buyers compete for the same number of homes for sale. More buyers in the market creates a “seller’s market,” whereby sellers don’t need to reduce prices or negotiate as much due to having multiple offers.

If you have the financial means to buy a home now, including the income, down payment, and financial stability, you may want to make the jump to homeownership today. Waiting for a recession could be a fool’s errand, as there’s no guarantee that one is around the corner. While you wait, home prices could increase — especially since they’ve been on a steady climb since 2020. If you’re worried about interest rates, it’s important to remember that you can always refinance to a lower rate in the future to save on borrowing costs.

This article was edited by Laura Grace Tarpley.

In 2021, the average 30-year mortgage rate fell below 3% — now it’s hovering around 6.75%. If you’re in the market for a mortgage loan, you may be wondering if you should wait until interest rates fall significantly before buying a house. When will mortgage rates finally drop back down near the 3% mark?

Read more: Is 2025 a good time to buy a house?

n 2020 and 2021, Americans witnessed record-low mortgage rates. The lowest 30-year fixed rate was 2.65% in January 2021, but rates hovered at or below 3% for roughly a couple of years. However, home loan rates probably won’t drop back down to 3% — at least not anytime soon.

To understand why, let’s look at what initially drove the drastic drop in interest rates and what’s behind the current higher rates.

Learn more: What determines mortgage rates? It’s complicated.

Home loan interest rates reached historic lows in 2021 as the Federal Reserve aggressively cut rates to mitigate the effects of the COVID-19 pandemic.

The pandemic impacted the economy in several ways, including widespread unemployment and supply shortages. To encourage spending and avoid a major recession, the Fed began lowering the federal funds rate in March 2020, making it cheaper to borrow money as Americans faced job losses.

Although many factors influence home loan rates, mortgage rates typically follow the general direction of the federal funds rate. And by late December 2020, the average rate for a 30-year mortgage was even lower than 3% at 2.66%.

Dig deeper: How the Federal Reserve rate decision affects mortgage rates

Lower interest rates and pandemic-relief stimulus programs increased consumer demand, one of several factors that drove the inflation rate.

The Federal Reserve monitors this rate, which measures the price change for goods and services, aiming to keep it around 2% according to yearly changes in the price index for personal consumption expenditures (PCE).

By 2022, the PCE inflation rate was over 5%, and the Fed began a series of fed funds rate hikes to curb it. The central bank raised its rate 11 times combined in 2022 and 2023. Mortgage rates followed suit, peaking at 7.79% in October 2023 before hovering around 6.6% at the end of the year.

Many experts expect 30-year mortgage rates to stay above 6% in 2025, anticipating a slight drop if they fall at all. Rates may decrease more in 2026, but economists still expect them to remain above 6% next year.

Whether we see lower rates depends on several economic factors. Here are just a few.

Inflation: Higher inflation can lead to higher mortgage rates if the Federal Reserve responds with a rate hike or even by keeping the fed funds rate unchanged.

Unemployment: High unemployment can cause demand for homes to fall, which could lead to lower mortgage rates.

10-year Treasury yield: Mortgage rates tend to follow the direction of the 10-year Treasury yield. Unlike the fed funds rate, the 10-year yield is a greater indicator of rates on longer-term loans — like home loans. Generally, investors buy more Treasury bonds as a safety net during economic uncertainty, which lowers yields and, ultimately, mortgage rates.

Keep reading: When will mortgage rates go back down to 4%?

Buying a home generally makes more sense when it fits your budget and goals than if you try to time the real estate market.

"Finding the right time to buy is not a science, and there are a lot of factors beyond just rates buyers should consider,” Beverly Hankinson, mortgage loan advisor manager at Frost Bank, said via email. “A term that’s become popular is, 'date the rate, marry the house.' If the home checks all your boxes, buying could make sense, especially if you can refinance in the future."

Current homeowners should factor in more than the interest rate when considering a mortgage refinance.

"If you are currently locked into a higher mortgage rate, it could be a good opportunity to explore a refinance,” noted Hankinson. “However, refinancing comes with a cost, so it’s important to weigh your monthly savings against other factors, including how long you plan to stay in your home. For example, if you plan to move for more space in the next two to three years, it might not make sense to pay the refinancing costs."

Dig deeper: Do mortgage rates go down during a recession?

Although you can’t control when mortgage rates fall, there are steps you can take to ensure you get the lowest mortgage rate possible.

Boost your credit score: You’re more likely to get a lower interest rate with a higher credit score. Improve your score by making on-time payments on credit cards and other debts and resolving errors on your report.

Pay down debt: Reducing your debt lowers your debt-to-income ratio (DTI ratio), a factor mortgage lenders consider when determining your loan eligibility and what rate you qualify for.

Compare multiple lenders: Apply for preapproval with more than one mortgage lender to compare interest rates, repayment terms, and discounts.

Negotiate fees: Pay attention to closing costs and ask your loan advisor if there’s an opportunity to waive or reduce some fees.

Learn more: You locked in a low mortgage rate. Now you want to move — What should you do?

It’s unlikely you’ll see a 3% mortgage rate anytime soon. According to Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage is well over 6%. Mortgage rates hit historic lows in 2021 due to the Federal Reserve’s response to the COVID-19 pandemic.

Some experts say mortgage rates could fall slightly in 2025, but don’t expect a significant drop in 30-year fixed-rate mortgages, which have hovered around 6% to 7% since fall 2022.

Timing the housing market can be difficult, especially when so many factors go into buying a home or refinancing. Generally, you should buy a house when you find the right one and it makes financial sense — you have enough saved for the down payment and can afford the monthly mortgage. Refinance when you can lower your interest rate or land better loan terms, like moving from an adjustable-rate to a fixed-rate mortgage.

This article was edited by Laura Grace Tarpley.