Mortgage Rates Hold Near 6.8% Amid Fed Stability, Housing Demand Rises

Mortgage rates in mid-2025 are hovering around 6.7% to 6.8% for 30-year fixed loans, influenced by economic uncertainty stemming from the Trump administration's trade policies, inflation concerns, and Federal Reserve actions. Despite three interest rate cuts by the Fed so far this year, mortgage rates have not declined significantly due to bond market dynamics and investor sentiment toward inflation and geopolitical risks. The Federal Reserve is expected to potentially cut rates later in the year, with some officials advocating for earlier cuts if inflation remains contained, though others urge caution. Mortgage approvals in the UK have shown signs of recovery, with increases in both purchase and remortgage approvals, supported by stable interest rates and more favorable mortgage products, suggesting improving market confidence. While inflation from tariffs has not yet materialized strongly, economists anticipate a possible rise by mid-summer, which will be critical for future rate movements and Fed policy decisions. Overall, mortgage rates remain influenced by a complex interplay of trade impacts, Federal Reserve policy, bond yields, and market confidence, with only slight declines expected in the near term.