Mortgage rates hit new 2025 lows in the last week of the year, giving potential homebuyers new momentum heading into 2026.
As of Tuesday, the average 30-year mortgage rate was 6.15%, down from 6.18% a week ago, according to Freddie Mac. The average 15-year mortgage rate fell to 5.44% from 5.5%.
The latest cuts mark a polarizing year for mortgage rates. They spent much of the first half of 2025 at nearly 7%, a level that was enough to slow the traditionally busy spring homebuying season. But it began to decline in the middle of the year and has stabilized at around 6.2% since mid-September.
“After starting the year near 7%, the average 30-year fixed-rate mortgage rate fell this week to its lowest level in 2025, an encouraging sign for potential homebuyers heading into the new year,” Freddie Mac chief economist Sam Khater said in a statement.
The recent stabilization of lower interest rates has helped some buyers and sellers return to the market. Housing contract activity jumped more than 3% in November, an unexpectedly large increase.
Lower mortgage rates and slower home price growth are helping buyers make some progress on affordability. Next year, many economists expect mortgage rates to average around current levels and prices to continue rising slightly. These factors could help the deep-frozen housing market begin to thaw.
“Interest rates have eased sharply in the second half of the year, making 2026 a rebound year for the housing market,” Joel Berner, senior economist at Realtor.com, said in a statement. “If this momentum continues into the 2026 buying season, we could see much stronger sales data than we saw through much of 2025.”
Claire Boston is a senior reporter at Yahoo Finance, covering housing, mortgages and home insurance.
