Mortgage Rates Today December 24, 2025 (Christmas Eve)
Other mortgage types have moved modestly as well, as per a Fortune report:
- 30-year jumbo: 6.521%, down from 6.529% last week and slightly higher than 6.451% a month ago
- 30-year FHA: 6.008%, down from 6.048% last week
- 30-year VA: 5.794%, down from 5.801% last week
- 30-year USDA: 6.078%, down from 6.090% last week
- 15-year conventional: 5.424%, down from 5.512% last week
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Why Mortgage Rates Feel High in 2025
Many homebuyers have felt stuck with mortgage rates lingering around 7% for months. After Federal Reserve cuts to the federal funds rate last year, there was hope that mortgage rates would drop, but any declines were short-lived. By January 2025, the average 30-year mortgage rate exceeded 7%, a stark contrast to the historic low of 2.65% in January 2021 during pandemic-era government interventions, as per the Fortune report.
Experts agree rates in the 2% to 3% range are unlikely to return under normal economic conditions. Economic policies and concerns over labor market contraction and inflation have contributed to ongoing uncertainty.
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Federal Reserve Rate Cuts and Their Impact on Mortgage Rates
Homebuyers began seeing more noticeable declines in rates in late August 2025. Rates eased ahead of the Federal Reserve’s September meeting and continued a gradual downward trend into October. The Federal Reserve cut the federal funds rate by a quarter-point in September, followed by another quarter-point in October and a third in December, helping rates inch lower.
Homebuyer Strategies to Lower Rates On Christmas Eve
Homebuyers looking for additional savings have also turned to rate buydowns, especially when purchasing newly constructed homes.
While borrowers cannot control the broader economy, their personal financial profile plays a major role in the rate offered.
Credit score: Conventional loans typically require at least 620, while FHA loans allow scores as low as 580 or 500 with a 10% down payment. Top-tier rates usually require a score of 740 or higher.
Debt-to-income ratio: A debt-to-income ratio of 36 percent or below is ideal, though some lenders may approve up to 43%.
Shop around: Comparing multiple lenders, including banks, credit unions, and online lenders, can help borrowers find the best rate. It is important to account for mortgage discount points when comparing offers.
Historical Perspective on Mortgage Rates
While today’s rates may feel high, they are not historically unusual. Rates in the 7% range have been common over the past several decades. For context, rates exceeded 18 percent in 1981, while the 2% to 3% rates of 2021 were an unusual product of pandemic-era government action.
For homeowners who locked in historically low rates during the pandemic, moving or refinancing now can be difficult, a situation sometimes referred to as the “golden handcuffs” effect, as per the Fortune report.
FAQs
Are mortgage rates falling at the end of 2025?
Yes, rates have dipped slightly, offering some relief for homebuyers.
What’s the current average 30-year mortgage rate?
It’s 6.149% for a fixed-rate conforming mortgage.