Mortgage interest rates directly impact your monthly housing costs. They also affect the profitability of an investment property. Several factors influence these rates. These include the overall economy, inflation, and actions by the Federal Reserve. Here are today’s average purchase rates, sourced from Zillow.

Conforming Loan Rates (Purchase)

Conforming loans follow rules set by Fannie Mae and Freddie Mac. This makes them a common choice for many buyers.

Source: Zillow, as of July 7, 2025

The 30-year fixed conforming rate remains in the high 6s. Notably, the 5-year ARM has seen a significant surge to 7.56%. For homebuyers, this means fixed-rate options offer more payment stability. For real estate investors, the higher ARM rate might make adjustable loans less appealing for now, unless you plan a very short-term hold or expect rapid rate drops.

Government Loan Rates (Purchase)

Government-backed loans, like FHA and VA loans, offer specific benefits. These can be useful for eligible homebuyers and investors.

Source: Zillow, as of July 7, 2025

FHA and VA rates offer competitive options, especially for those who qualify. VA loans, in particular, often present lower rates for eligible veterans.

Jumbo Loan Rates (Purchase)

Jumbo loans are for larger mortgage amounts. They are typically used for higher-priced homes or investment properties.

Source: Zillow, as of July 7, 2025

Jumbo loan rates are generally higher than conforming rates due to the larger loan amounts. The mixed movements in ARM rates for jumbo loans highlight the need for careful consideration for large investments.

Expert Analysis and Forecasts for July, 2025, and 2026

Understanding where mortgage rates are headed is vital for both short-term decisions and long-term planning. Experts analyze economic data to make their predictions.

Current Market Commentary

“With little new out of the meeting, mortgage rates are likely to continue to hover in the high-6% range that has dominated for the last 8-plus months,” said Danielle Hale, chief economist at Realtor.com. This suggests a period of relative stability around current levels. Source: Forbes Advisor

However, some experts see potential for a shift. “A decline in mortgage rates later this summer could give a jolt to the housing market, bringing buyers off the sidelines to take advantage of the dip in rates and expanded inventory,” said Lisa Sturtevant, chief economist at BrightMLS. This indicates that even small rate drops could spur activity. Source: Forbes Advisor

Mortgage Rate Forecasts: 30-Year Fixed

Here’s what leading organizations predict for 30-year fixed mortgage rates:

Sources: Forbes Advisor, Investopedia, Trading Economics (MBA), Scotsman Guide (Fannie Mae), The MortgagePoint (Fannie Mae), ALTA (Fannie Mae), Alpine Banker (MBA, NAR, Fannie Mae), NAR Newsroom (Lawrence Yun), Wood Floor Business (NAR), National Mortgage Professional (NAR), Bankrate, Morningstar

The forecasts show a general expectation for rates to gradually decline through 2025 and into 2026. However, there’s a range of opinions, with some experts predicting rates will stay “higher-for-longer.”

Key Influencers on Rates

• Federal Reserve Policy: The Fed’s decisions on its benchmark interest rate heavily influence mortgage rates. While some policymakers expressed openness to cuts in July, economists see a July cut as unlikely. Expectations for cuts are higher for September 2025. Source: Forbes Advisor

• Inflation: Persistent inflation above the Fed’s 2% target could delay significant rate cuts.

• Economic Growth: A strong labor market and steady economic growth can keep demand for credit high, putting upward pressure on rates.

• 10-Year Treasury Yield: This bond yield is a key indicator for mortgage rates. When this yield goes up, mortgage rates often go up too. When it falls, mortgage rates usually drop.

These factors are always in play. Staying aware of them helps you understand why mortgage rates move. It also helps you predict future changes.

Related: U.S. Mortgage Rate Forecast and Expert Predictions for 2025, 2026, 2027 and 2028

What This Means for Homebuyers

For those looking to buy a home, today’s rates offer both challenges and opportunities.

• Affordability: Rates in the high 6s still mean higher monthly payments compared to recent years. This can impact how much home you can afford.

• Fixed vs. Adjustable: A 30-year fixed-rate mortgage provides payment stability. This is good if you plan to stay in your home for a long time. The recent surge in the 5-year ARM rate makes fixed options look more appealing for many.

• Don’t Wait Indefinitely: “For aspiring home buyers, the right time to buy really depends on your individual goals and financial situation,” says Fred Bolstad, head of retail home lending at U.S. Bank. “If you are in the financial position to afford the payments on a home you find and love, there is no need to wait.” Source: Forbes Advisor

• Shop Around: Always compare offers from multiple mortgage lenders. This can help you find the best deal for your financial profile.

What This Means for Real Estate Investors

For property investors, understanding these rate movements is crucial for maximizing returns and managing risk.

• Cash Flow Impact: Higher interest rates mean higher mortgage payments. This directly affects the cash flow from your rental properties. You need to ensure your rental income can cover these costs and still provide a profit.

• Refinancing Opportunities: If rates do decline as some forecasts suggest for late 2025 and 2026, it could be a prime time to refinance existing properties. A lower rate can significantly boost your cash flow. “There’s a strong likelihood to refi later in 2026 or 2027, as I do expect longer-term rates to move lower,” said Rich Martin, director of Real Estate Lending Solutions at Curinos. Source: Investopedia

• Purchase Strategy: For new acquisitions, consider the long-term rate outlook. If you believe rates will fall, an ARM might be an option if you plan to refinance before the fixed period ends. However, fixed rates offer more certainty.

• Market Activity: “Stable mortgage rates coupled with moderately rising inventory are attracting homebuyers into the market,” said Sam Khater, Chief Economist at Freddie Mac. This suggests a more active market, which can be good for both buying and selling investment properties. Source: Capital.com

• Supply and Demand: While inventory is rising in some areas, the “lock-in effect” (homeowners with very low rates not wanting to move) continues to limit supply. This can keep prices firm in many markets. “The lack of supply is primarily a lock-in issue,” said John Sim, head of Securitized Products Research at J.P. Morgan. Source: J.P. Morgan

Related: U.S. Real Estate Market Forecast and Expert Predictions for the Next 5 Years to 2030

U.S. Mortgages for International Investors and Non-Residents

If you are an international investor looking to buy property in the U.S., you can secure a mortgage. The process differs from that for U.S. citizens. Lenders typically require a strong financial background, including a solid credit history from your home country, verifiable stable income, and often a larger down payment.

Several loan programs are available for foreign nationals and non-residents. These loans cater to individuals who may not have a U.S. credit history or a Social Security number.

Related: U.S. Mortgages for Foreign Nationals and Non-Residents: 2025 Essential Guide

Key Considerations for International Investors

• Larger Down Payments: Expect to put down a higher percentage of the home’s price, often 20% to 40%. This reduces the lender’s risk.

• Proof of Funds: You will need to show clear documentation of your financial assets. This includes bank statements and investment accounts.

• Income Verification: Lenders will require proof of stable income from your home country. This ensures you can afford the mortgage payments.

• No U.S. Credit History: Many foreign national loan programs do not require a U.S. credit score. Instead, lenders may look at your credit history from your home country or other financial records.

• Visa Status: Your visa status can affect your eligibility. Some visas are more favorable for obtaining a mortgage than others.

• Tax Implications: Be aware of U.S. tax laws related to foreign ownership of real estate. Consulting a tax professional is highly recommended.

While the process might be more complex, many lenders specialize in foreign national loans. They can guide you through the specific requirements.

Related: DSCR Loans for Foreign Nationals and Non-Residents: Everything You Need to Know

Conclusion: Navigating Today’s Mortgage Landscape

Today’s mortgage rates reflect a complex economic environment. While the 5-year ARM saw a notable jump, fixed rates remain in a range that requires careful planning.

For homebuyers, understanding your budget and long-term goals is key. For real estate investors, these rates demand a strategic approach to cash flow, financing, and future opportunities. This includes considering options for international investors. Keep an eye on economic indicators and expert forecasts to make the best decisions for your financial future.

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