Mortgage Rates Near 7% Amid Inflation Surge

As of February 18, 2025, 30-year fixed mortgage rates have slightly decreased to 6.87%, following a recent surge in inflation, which reached an annual rate of 3.0% in January. This inflation spike has raised concerns among housing experts who believe that significant reductions in mortgage rates may be challenging if market volatility persists. The fluctuations in mortgage rates are closely tied to the performance of 10-year Treasury yields, which reacted to both the inflation data and recent tariff announcements by President Trump. Experts indicate that the current economic landscape, characterized by rising inflation and uncertain market conditions, is likely to keep mortgage rates hovering between just below 6.9% and just above 7% throughout 2025. Analysts have also noted that traders are adjusting their expectations for future Federal Reserve rate cuts, seeing low chances of reductions before September. Consequently, many believe that the days of significantly lower mortgage rates are behind us, particularly if inflation remains persistent.