Mortgage Rates Hit 5-Week Low: Is the Housing Market Finally Turning?

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News Flash

Rate Relief: Mortgage Costs Drop for Fifth Straight Week

Good news – mortgage rates have continued their downward momentum. The average 30-year fixed mortgage rate dropped to 6.67% for the week ending July 3, 2025.

This marks the fifth consecutive week of declines and represents the largest weekly dip since early March.

At their lowest point since May 2025, these rates may finally offer some breathing room in a market where affordability has been a significant hurdle.

As of July 4, other reports show the average 30-year fixed rate hovering around 6.68%, with the average 15-year fixed rate at approximately 5.85%.

While still well above historic lows we saw during the pandemic, these numbers represent welcome relief for buyers.

Looking ahead, there's potential for further rate drops. The Federal Reserve kept its benchmark interest rate steady between 4.25% and 4.5% at its June meeting, but some projections suggest two possible rate cuts before year-end.

And Buyers Have Responded; Mortgage Applications are Up

Overall mortgage application activity increased by 2.7% for the week ending June 27, 2025. This uptick is particularly notable following the previous week's 3.9% decrease.

Digging deeper into the numbers, refinance applications jumped 7% week-over-week as homeowners scramble to capitalize on falling rates while purchase applications remained essentially flat during the same period. The refinancing surge has pushed the refinance share of total mortgage application activity to 36.7%.

This split between refi enthusiasm and purchase hesitation raises an interesting question: Since we are seeing existing homeowners adapting to the new rate environment, will buyers follow?

Sources: [Source], [Source], [Source]

More You Should Know

• CRE Market Stabilizes Mid-2025: The commercial real estate sector is exhibiting mid-year 2025 stability with 88% of executives anticipating revenue growth, as industrial vacancy rates remain steady, hotel occupancy nears pre-pandemic levels, and transaction volumes are projected to increase by 25-30%, despite ongoing challenges in the office building segment. [Source]

• Single-Family Rentals Thrive: In Q2 2025, the single-family rental market maintained its robust performance, characterized by strong renter demand, scarce new inventory, and increased investor focus on mid-sized properties in suburban high-growth regions. [Source]

• Tax Bill Could Boost Real Estate: The Senate’s passage of the “One Big Beautiful Bill Act” could significantly impact real estate; it permanently increases the estate and gift tax exemption to $15 million, solidifies current mortgage interest deductions, expands the Low-Income Housing Tax Credit, and raises the state and local tax (SALT) deduction cap to $40,000. [Source]

• REITs See Strong 2025: Real Estate Investment Trusts are demonstrating robust performance in 2025, with top performers like American Healthcare REIT, Vornado Realty Trust, and Welltower Inc. showing significant gains, and industry experts anticipating continued growth through 2027. [Source]

• Housing Market Splits Regionally: Despite a modest national median home value increase, the 2025 U.S. housing market exhibits pronounced regional disparities, as some areas like Texas and Florida face rising price cuts and inventory surges while the Northeast maintains strong pricing due to constrained new construction. [Source]

• Construction Deals Stay Strong: Engineering and construction deal activity remains steady in 2025, buoyed by consistent housing demand and infrastructure investments, even as the industry navigates challenges such as labor shortages, tariffs, and high interest rates. [Source]

• AI Fuels Data Center Real Estate Boom: Driven by increasing artificial intelligence adoption, data center construction is rapidly expanding, exemplified by companies like xAI securing permits for significant power infrastructure to support their growing operations. [Source]

• Rental Market Stabilizes Amid Shifts: The national median rent rose slightly to $1,401 in June 2025, marking the fifth consecutive monthly increase but with slower growth, as the market navigates a record-high 7% vacancy rate and regional variations driven by new supply absorption. [Source]

• California Fast-Tracks Housing: California has significantly rolled back the California Environmental Quality Act (CEQA) requirements for urban infill housing projects, aiming to expedite development and address the state's severe housing crisis. [Source]

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