Mortgage rates hit a fresh 2025 low in the final week of the year, giving would-be homebuyers new momentum headed into 2026.
The average 30-year mortgage rate was 6.15% through Tuesday, according to Freddie Mac data, down from 6.18% a week earlier. The average 15-year mortgage rate fell to 5.44%, from 5.5%.
The latest move lower caps a bifurcated year for mortgage rates. They spent much of the first half of 2025 near 7%, a level high enough to slow the traditionally busy spring homebuying season. But they began to fall mid-year and have held steady around 6.2% since mid-September.
“After starting the year close to 7%, the average 30-year fixed-rate mortgage moved to its lowest level in 2025 this week, an encouraging sign for potential homebuyers heading into the new year,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
The recent stability at lower rates has helped bring some buyers and sellers back to the market. Housing contract activity jumped by more than 3% in November, an unexpectedly large gain.
Lower mortgage rates and slower home price growth are helping buyers make some inroads with affordability. Next year, many economists expect mortgage rates to average around current levels, and for prices to continue to rise only modestly. Those factors may help the deeply frozen housing market begin to thaw.
“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,” Realtor.com senior economist Joel Berner said in a statement. “If this momentum continues into the peak buying season of 2026, we could see much stronger sales figures than we saw for much of 2025.”
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.