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August 29, 2025
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August 29, 2025
The “New Normal” for Mortgage Rates and What It Means for You
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Mortgage rates are holding steady at 6.5%, a positive sign after weeks of trending in the right direction. Inflation numbers came in as expected, and the jobs report is coming soon. While steady is encouraging, it does not mean the market is back to normal.
The housing market has not been truly normal for nearly 20 years. Before the 2008 crash, rates were around 6% to 6.5%, lending standards were loose, and builders were producing homes at a rapid pace. The crash left the industry with oversupply and too few qualified buyers. Lending standards tightened, builders pulled back, and rates stayed historically low for over a decade.
During Covid, rates dropped under 3%, fueling a surge of purchases and refinances. Inflation surged, the Fed raised rates 11 times, and by October 2023 mortgage rates peaked at 7.82%. Since then, rates have been trending lower.
Experts now believe the new long-term “normal” will be 5% to 5.5% for conventional loans. That may surprise buyers who are hoping for the 2% to 3% rates of the pandemic, but this new range is far more sustainable for the housing market.
For homebuyers today, the key opportunity is timing. Many sellers are still offering concessions to help cover closing costs or buy down your rate. These offers make homes more affordable, but they are unlikely to last once demand picks up again. Waiting may mean losing thousands of dollars in seller help and facing higher home prices.
The path forward is toward stability. Gradual declines in rates, steady increases in home values, and more housing supply will create a healthier market by 2026. For buyers, that means acting strategically now rather than waiting for a “normal” that may never return.
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The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.
Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).
Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.
For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.
Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.
Mortgage News Daily (MND) is a trademark of Brown House Media, Inc. Zillow is a trademark of Zillow, Inc. CrossCountry Mortgage has not been authorized, sponsored, or otherwise approved by Brown House Media, Inc. or Zillow, Inc.
Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.
