Mortgage rate update for November 18, 2025: Rates show a slight increase

Current mortgage rates data:

Coins2Day examined Optimal Blue’s most recent data on November 17, showing home loans secured by November 14. 

What's the current situation with mortgage rates in today's market?

It might feel like 30-year mortgage rates have been stuck near 7% for ages, and that's not too far from the truth. A lot of market observers expected rates to drop once the Federal Reserve started lowering the federal funds rate last year, but that didn't happen. There was a brief dip just before the Fed's September 2024 meeting, but rates bounced back up rapidly afterward.

As of January 2025, the typical interest rate for a 30-year, fixed-rate mortgage surpassed 7%, marking the first instance since last May, based on Freddie Mac data. This represents a substantial rise from the historically low average of 2.65% recorded in January 2021, a period when the government was actively working to stimulate the economy and avert a pandemic-related recession.

Experts believe that, absent another significant crisis, mortgage rates won't return to the 2% to 3% range within our lifetimes. Furthermore, given the uncertain economic forecast shaped by President Donald Trump's policies, such as tariffs and deportations, certain analysts have expressed concerns about potential labor market contraction and the resurgence of inflation. In this environment, American home buyers have consistently encountered elevated mortgage rates. However, some have discovered ways to ease their purchase burden, including negotiating rate buydowns with builders when acquiring new homes.

Homebuyers and those looking to refinance mortgages found some relief in late August and early September of 2025. Prior to the Federal Reserve's meeting on September 16-17, mortgage rates began a distinct downward trend, reaching a nearly year-long low. As anticipated, the Fed implemented a quarter-point decrease in the federal funds rate during that gathering. The central bank subsequently enacted another quarter-point reduction to its key rate by the close of October.

Securing the most favorable mortgage rate available

Even though economic circumstances are outside of your influence, your financial standing as a borrower significantly affects the mortgage interest rate you receive. Considering this, strive to accomplish the following:

• Ensure your credit is in excellent condition. While a 620 credit score is typically the lowest accepted for a conventional mortgage (FHA loans may allow 580, or even 500 with a 10% down payment), achieving a significantly higher score is advisable if you aim for a favorable interest rate that could result in substantial savings, potentially five or six figures, over the loan's duration. Blue Water Mortgage, a lender, suggests that a score of 740 or above is considered excellent.
• Maintain a low debt-to-income (DTI) ratio. You can calculate your DTI by dividing your monthly debt payments by your gross monthly income, then multiplying by 100. For example, someone with a $3,000 monthly income and $750 in monthly debt payments has a 25% DTI. When applying for a mortgage, it’s typically best to have a DTI of 36% or below, though you may be approved with a DTI as high as 43%.
• Get prequalified with multiple lenders. It's a good idea to explore options from major banks, community credit unions, and digital lenders, then compare their proposals. Furthermore, speaking with loan officers at various institutions can assist you in determining your lender preferences and which entity is most suitable for your requirements. When comparing interest rates, make sure your evaluation is uniform; for instance, if one quote includes the purchase of mortgage discount points and another does not, it's crucial to understand that acquiring points to lower your rate involves an initial expenditure.

Historical chart of mortgage interest rates

The current discussion surrounding elevated mortgage rates, hovering around 7%, feels significant primarily because rates between 2% and 3% remain a recent memory. Such low rates were a consequence of extraordinary government interventions designed to avert a recession during the nation's struggle with a global pandemic.

Experts concur that under more standard economic circumstances, we probably won't witness such extraordinarily low interest rates again. Rates near 7% are historically not considered exceptionally high.

Looking at a St. Louis Fed (FRED) chart that uses Freddie Mac data for the average 30-year, fixed-rate mortgage reveals that these rates were fairly typical from the 1970s to the 1990s, except for a notable surge in the early 1980s. Specifically, mortgage interest rates climbed above 18% during September, October, and November of 1981.

Certainly, this historical viewpoint provides minimal comfort to property owners who might wish to relocate but are constrained by an unprecedentedly low interest rate. These circumstances are prevalent enough in today's market that the low rates from the pandemic period, which prevent homeowners from moving when they otherwise might have, have come to be recognized as the “golden handcuffs.”

Elements influencing mortgage interest rates

The U.S. Economy's condition is likely the primary factor influencing mortgage rates. If lenders grow concerned about inflation, they might increase rates to safeguard their future earnings.

Furthermore, the national debt plays a significant role. When the government's expenditures exceed its revenue, necessitating borrowing, this can lead to increased interest rates.

Home loan demand is also significant. When demand is weak, lenders may lower rates to draw in customers. Conversely, if a large number of individuals are applying for mortgages, lenders might increase rates to manage the increased workload.

The Federal Reserve also has a significant function, with the ability to affect mortgage rates through adjustments to the federal funds rate and by engaging in asset purchases or sales.

The federal funds rate's adjustments receive considerable attention. Mortgage rates frequently mirror its upward or downward movements. However, it's vital to grasp that the Fed doesn't directly determine mortgage rates, nor do they consistently align perfectly with the fed funds rate.

The Federal Reserve also impacts mortgage rates through its balance sheet. In periods of economic difficulty, it has the ability to purchase assets such as mortgage-backed securities (MBS) to inject funds into the economy.

However, the Fed has recently been reducing its balance sheet, allowing assets to mature without reinvestment. This action typically leads to higher mortgage rates. Therefore, while attention is focused on reductions in the fed funds rate, the central bank's balance sheet management could have a greater impact on the mortgage rate you're offered. 

The significance of comparing mortgage rates

To secure the most suitable mortgage, it's crucial to compare interest rates across various loan types and explore options from multiple financial institutions.

For those with superior credit, a traditional mortgage could be a suitable option. Conversely, if your score falls under 600, an FHA loan might present a possibility that a conventional loan wouldn't.

Investigating choices with various banks, credit unions, and online lenders can substantially impact your total expenses. Freddie Mac's findings suggest that during periods of elevated interest rates, prospective homeowners might reduce their yearly outlays by $600 to $1,200 by seeking quotes from several mortgage providers.