Average 30-Year Mortgage Rate Falls as Holiday Season Begins
Average mortgage rates fell this week, according to Fox Business. Freddie Mac reported the 30-year fixed mortgage rate decreased to 6.18 percent on December 24, 2025. This represents a decline from 6.21 percent the previous week.
The current rate sits below last year's figure of 6.85 percent. A 15-year fixed mortgage rate moved in the opposite direction. It increased to 5.5 percent from 5.47 percent the prior week. One year ago, the 15-year rate stood at 6.0 percent.
Mortgage rates track the 10-year Treasury yield rather than Federal Reserve policy directly. The 10-year yield registered around 4.14 percent as of Wednesday afternoon. Recent economic data showed third-quarter GDP growth reached 4.3 percent. The consumer price index rose 0.2 percent in November. Employment data revealed 64,000 jobs added in November with unemployment at 4.6 percent.
Market Effects for Homebuyers
The rate decline provides modest relief for potential homebuyers entering 2026. Realtor.com senior economist Jake Krimmel noted inventory levels exceed last year's figures in most markets. Buyers face improved conditions compared to the spring season of 2025.
Purchase power could increase if rates maintain current levels or decline further. The improvement benefits buyers after two slow years in the housing market. However, Bankrate reports fixed-rate mortgages follow the 10-year Treasury yield movements. The yield climbed near 4.2 percent after recent announcements. This connection means mortgage rates could rise despite Federal Reserve cuts.
More than 80 percent of homeowners hold mortgages below 6 percent rates. This lock-in effect continues to restrict housing supply. Affordability challenges persist despite rate improvements. The income needed for a median-priced home qualification exceeded 104,000 dollars per year as of April 2025.
Long-Term Outlook Remains Uncertain
Fannie Mae forecasts mortgage rates will end 2026 at 5.9 percent. The government-sponsored enterprise projects total home sales will reach 4.72 million in 2025. Sales should increase to 5.16 million in 2026 according to their September outlook.
Single-family mortgage originations are expected to total 1.85 trillion dollars in 2025. That figure could rise to 2.32 trillion dollars in 2026. The refinance share should climb from 26 percent to 35 percent as rates decline.
Industry analysts maintain different predictions about rate movements. Some experts suggest rates will settle between 5.5 and 6.5 percent by mid-2026. The Mortgage Bankers Association predicts rates will hold at 6.4 percent throughout 2026. Historical context shows current rates align with 1990s levels despite appearing high compared to pandemic-era lows.
Fed rate cuts do not guarantee lower mortgage rates. Treasury yields fluctuated throughout 2024 and into 2025. Inflation concerns and global economic conditions influence rate directions. The central bank made three cuts in 2025 totaling 75 basis points. Yet mortgage rates remained above 6 percent for most of the year.
Further Reading
For deeper insights into global adoption trends and regulatory frameworks across multiple markets, our Alternative Financial Systems Index tracks adoption metrics and policy developments. The index covers 50 countries with detailed analysis of housing finance systems and mortgage market structures.
