After a roller coaster of a few weeks, mortgage rates seem to be reversing course. It's hard to know whether that trend will hold, though, economists say.
As of Thursday, the 30-year, fixed-rate mortgage average had clocked its second consecutive week of declines, landing at 6.76%, according to mortgage giant Freddie Mac, a buyer of loans from banks.
The 15-year, fixed-rate mortgage, also eased, averaging 5.92%, Freddie Mac said.
Daily mortgage rates — known to be more variable because they are susceptible to the ins and outs of the markets — were following a similar trend as of Thursday afternoon, according to Mortgage News Daily.
The 30-year, fixed-rate mortgage was unchanged at 6.81%, and the 15-year, fixed-rate mortgage was slightly lower at 6.15%. Both figures were lower than the same time a week earlier.
Could May be a better month for mortgage rates?
It’s a sign that May’s mortgage market could look different — maybe even better — than April's. Last month, White House policies and economic data stirred volatility and uncertainty in the mortgage market. Now, some experts say things could be settling down, but it would take time before borrowers feel safe reentering the market.
On the one hand, economic data drives mortgage rates, and right now, experts see a future where the economy moves in a direction that would bring a decrease in borrowing costs, especially if the Federal Reserve lowers interest rates.
But knowing what’s actually going to happen is difficult, according to Sean Salter, an associate professor at Middle Tennessee State University.
“With news that GDP contracted slightly in the first quarter of 2025, it is likely that markets will expect additional Fed rate cuts to provide stimulus. Markets will no doubt bake these expected rate cuts into current rates,” Salter told personal finance website Bankrate in a weekly survey.
“However, some of this expectation hinges on news related to trade deals and tariffs,” he added. “If the Trump administration can claim some wins in the trade arena, the economy may spark without significant rate cuts.”
In other words, in the near-term, as markets anticipate an interest rate cut from the Fed, mortgage rates could ease up. To be clear, the Fed doesn't set mortgage rates, but when the central bank moves interest rates, it sends a ripple effect through the economy that reaches mortgages.
Whether that actually happens depends on how the White House handles policy going forward, especially as it relates to taxes on imports to the United States.
Borrowers are still hesitant
Even if the mortgage market continues to soften, it could take time for borrowers to come back to the market, according to the Mortgage Bankers Association.
The trade group reported that mortgage applications decreased for the second consecutive week.
"Uncertainty continues to impact many buyers’ decisions to enter the housing market," Bob Broeksmit, the group's president and CEO, said in a statement Thursday.
Part of the issue is that borrower uncertainty extends beyond just mortgages, according to Joel Kan, MBA's vice president and deputy chief economist.
"Mortgage application activity, particularly for home purchases, continues to be subdued by broader economic uncertainty and signs of labor market weakness, dropping to the slowest pace since February,” he said in a statement.
There are some bright spots in the market, though. For one, mortgage applications are still higher than they were one year ago.
At the same time, increasing inventory in the housing market has opened up more opportunity, especially for first-time homebuyers, prompting some growth among that population of borrowers.
"Purchase activity continues to outpace year-ago levels as growing housing inventory — including at the lower end of the market — is offering home shoppers more options," Broeksmit said.
