What happened to mortgage rates this week
The Freddie Mac 30-year fixed mortgage rate dropped slightly to 6.15% in the last readout of 2025 after registering at 6.18% last week. This marks the lowest readout of 2025, a year in which rates averaged 6.6%. The yield on the 10-year Treasury note has softened during this holiday season, giving mortgage rates a bit of breathing room at year’s end. There is little indication that the Federal Reserve will make any major changes to interest rates in January, and the market is responding favorably to a period of relative stability.
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What it means for the housing market
Affordability was the primary constraint on the housing market in 2025, with mortgage rates clocking in the mid-6% range for most of the year and home prices remaining elevated, which kept many buyers on the sidelines. Rates have retreated in a meaningful way during the second half of the year and are on track to make 2026 a year of rebound for the housing market. If this momentum continues into the peak buying season of 2026, we could see much stronger sales figures than what we saw for much of 2025. Already, pending home sales have responded to the relief from mortgage rates and are helping the market to pick up steam through what is traditionally the slowest part of the year.
