If you've been waiting for mortgage rates to improve, your patience may be paying off. The 30-year fixed-rate mortgage has held below 6.64% for 18 consecutive weeks—the best sustained period of 2025. At 6.19% as of last week, rates are half a percentage point lower than this time last year.

With the Federal Reserve meeting this week and markets expecting another rate cut, is now finally the time to act?

Where Rates Stand

30-year fixed: 6.19% (down from 6.23% last week, 6.69% a year ago)

15-year fixed: 5.44% (down from 5.51% last week, 5.96% a year ago)

Mortgage purchase applications have surged to near three-year highs as buyers respond to improved affordability. The combination of lower rates and stable home prices is creating the most favorable environment since early 2024.

Will the Fed Cut Help?

Here's the tricky part: mortgage rates don't directly follow the Federal Reserve's rate decisions. The Fed controls short-term rates; mortgages track long-term Treasury yields.

When the Fed cuts rates, it signals confidence that inflation is under control. This can push Treasury yields lower, which helps mortgages. But if inflation concerns persist—as they have with tariffs adding price pressure—Treasury yields might not fall even with Fed cuts.

Bottom line: A Fed cut this week is already priced into current mortgage rates. Don't expect a dramatic drop Wednesday afternoon.

The Affordability Math

Let's put current rates in perspective:

On a $400,000 home with 20% down ($320,000 loan):

  • At 6.19%: Monthly payment of $1,958
  • At 6.69% (last year): Monthly payment of $2,060
  • At 7.79% (peak 2023): Monthly payment of $2,298

That's $102/month savings compared to last year, or $340/month compared to the 2023 peak. Over a 30-year loan, those differences compound to tens of thousands of dollars.

Should You Buy Now?

The decision depends on your situation, not market timing:

Buy if:

  • You plan to stay at least 5-7 years (long enough to build equity and offset transaction costs)
  • You have a stable income and 3-6 months emergency fund
  • Your total housing cost (mortgage, taxes, insurance) stays below 28-30% of gross income
  • You've found a home you actually want to live in

Wait if:

  • You might relocate within 3-5 years
  • Your job situation is uncertain
  • You're stretching to afford the payment
  • You're buying purely because you think rates might rise

Should You Refinance?

Refinancing makes sense when the math works:

Rule of thumb: Refinancing typically pays off if you can reduce your rate by at least 0.5-0.75 percentage points and plan to stay in the home long enough to recoup closing costs (usually 2-4 years).

Who should consider refinancing now:

  • Homeowners who bought in 2023 at rates above 7%
  • Those with adjustable-rate mortgages nearing adjustment periods
  • Borrowers with improved credit scores who could qualify for better rates

Who should wait:

  • Homeowners with rates below 5% (you won't do better)
  • Those who refinanced in the past 2 years
  • Borrowers planning to sell within 2-3 years

The Rate Trajectory

Where are rates headed? Forecasters are divided:

Optimistic view: If inflation continues cooling and the Fed keeps cutting, rates could dip below 6% in early 2026. Mortgage spreads (the gap between mortgage rates and Treasury yields) have been improving, which helps.

Cautious view: Tariff-driven inflation and economic uncertainty could keep rates elevated. Don't expect a return to the 3-4% rates of 2020-2021—those were anomalies driven by emergency Fed policy.

Realistic expectation: Rates likely stay in the 5.5-6.5% range through 2026. That's elevated by historical standards but manageable for most buyers.

How to Get the Best Rate

Regardless of market conditions, you can improve your personal rate:

1. Shop multiple lenders

Rates vary significantly between lenders. Get quotes from at least 3-5 lenders, including banks, credit unions, and online lenders.

2. Improve your credit score

Every 20-point improvement can save 0.125-0.25% on your rate. Pay down credit cards and fix any errors on your report.

3. Consider points

Paying points (prepaid interest) can lower your rate. This makes sense if you plan to keep the loan long-term.

4. Increase your down payment

Larger down payments typically qualify for better rates and eliminate PMI at 20%.

The Bottom Line

Mortgage rates at 6.19% represent the most favorable conditions of 2025. Whether that's good enough depends on your financial situation and housing needs—not on trying to perfectly time the market.

If you're ready to buy or refinance and the math works for your budget, waiting for a marginally better rate may not be worth the risk of rates moving higher instead.

The best mortgage rate is the one you can comfortably afford on a home you want to live in. Everything else is speculation.