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Key Rates Move Higher for Homebuyers: Current Mortgage Interest Rates on July 23, 2025
Key Rates Move Higher for Homebuyers: Current Mortgage Interest Rates on July 23, 2025

CNET

time21 minutes ago

  • Business
  • CNET

Key Rates Move Higher for Homebuyers: Current Mortgage Interest Rates on July 23, 2025

Check out CNET Money's weekly mortgage rate forecast for a more in-depth look at what's next for Fed rate cuts, labor data and inflation. The average interest rate for a standard 30-year fixed mortgage is 6.78% today, up 0.03% over the last week. The average rate for a 15-year fixed mortgage is 6.05%, which is an increase of 0.05% from the same time last week. To qualify for lower mortgage rates, experts recommend making a higher down payment, improving your credit and comparison shopping between lenders. What's keeping mortgage rates elevated this year? Stubborn inflation, threats of a global trade war and policy turbulence have created an uncertain economic outlook. In response, the Federal Reserve has adopted a wait-and-see approach and holding borrowing rates steady since the start of the year. Most economists predict the Fed will start lowering rates in September, particularly if President Trump eases some of his aggressive tariff measures or if the labor market continues to deteriorate. Prospective homebuyers shouldn't bank on mortgage rates becoming affordable overnight. While cheaper borrowing costs gradually trickle down to the housing market, the Fed doesn't directly set lenders' mortgage rates. In today's unaffordable housing market, mortgage rates are just one piece of the puzzle. Prospective buyers still have to contend with high home prices and skyrocketing homeownership expenses. The possibility of a job-loss recession is also pushing many households to tighten their budgets and take on less financial risk. When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a custom quote from one of CNET's partner lenders. About these rates: Bankrate's tool features rates from partner lenders that you can use when comparing multiple mortgage rates. What's going on with mortgage rates right now? The average 30-year fixed rate has hovered just below 7% for the last several months, resulting in cost-prohibitive monthly payments. Mortgage rates are closely tied to the bond market, specifically the 10-year Treasury yield, which responds to investors' expectations for inflation, labor data, changes to monetary policy and global measures like tariffs. "Rates could fall if inflation keeps cooling and the labor market softens," said Jeb Smith, licensed real estate agent and member of CNET Money's expert review board. "On the other hand, tariffs could create new inflation pressure. Add in government deficits and increased bond supply, and that puts upward pressure on rates." Even as the Fed eventually starts to lower interest rates, experts caution that significant market volatility is likely. As a result, homebuyers are adopting a more patient and strategic approach to financing, comparing various loan types and planning ahead. "Some are waiting, others are getting pre-approved now so they're ready to act if rates fall," said Smith. For a look at mortgage rate movement in recent years, see the chart below. Expert predictions for mortgage rates in 2025 Despite optimism about the 2025 housing market, persistent economic challenges and political instability have prevented it from bouncing back. Median family income has not kept pace with the surge in housing costs, requiring many households to earn double or triple their salary to afford a modest home in some cities. Mortgage rates would have to take a big step down, close to 6% or below, to drum up significant homebuying demand. But according to Smith, the more likely scenario is a slow and steady decline in borrowing costs. A return to the record-low rates, around 2-3%, we saw during the pandemic would only happen if the economy tipped into a severe recession. Fannie Mae's forecast puts rates around 6.5% by the end of 2025 and 6.1% by the end of 2026. Numerous risks could keep rates elevated. For instance, if tariffs cause inflation to reignite, which most experts and Fed officials expect, it could result in higher bond yields and fewer interest rate cuts by the central bank. Neither would help bring mortgage rates down for prospective buyers. What is a good mortgage type and term? Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront. 30-year fixed-rate mortgages The average interest rate for a standard 30-year fixed mortgage is 6.78% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you'll have a lower monthly payment. 15-year fixed-rate mortgages Today, the average rate for a 15-year, fixed mortgage is 6.05%. Though you'll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner. 5/1 adjustable-rate mortgages A 5/1 ARM has an average rate of 5.88% today. You'll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option. Calculate your monthly mortgage payment Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET's mortgage calculator below can help homebuyers prepare for monthly mortgage payments. Where can I find the best mortgage rates? Though mortgage rates and home prices are high, the housing market won't be unaffordable forever. It's always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right. Save for a bigger down payment: Though a 20% down payment isn't required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest. Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates. Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments. Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.

Jerome Powell should resign, top economist Mohamed El-Erian says, citing a scandal Trump hasn't even mentioned
Jerome Powell should resign, top economist Mohamed El-Erian says, citing a scandal Trump hasn't even mentioned

Yahoo

time3 hours ago

  • Business
  • Yahoo

Jerome Powell should resign, top economist Mohamed El-Erian says, citing a scandal Trump hasn't even mentioned

In a surprising turn, top economist Mohamed El-Erian has broken with convention among financial leaders by publicly calling for Federal Reserve Chair Jerome Powell to resign. El-Erian's comments, issued via social media and elaborated in press interviews, are remarkable not only for their candor, but for their counterintuitive reasoning: El-Erian believes Powell should step aside to protect the institution's independence in the face of multiplying political attacks. Most financial leaders who are insisting that Powell resist the pressure he's facing from Trump are the exact opposite, citing central bank independence as the reason Powell must stay. As the White House has ratcheted up its criticism of Powell, speculation has grown about potential leadership changes at the Federal Reserve. Donald Trump has been outspoken in his demands that Powell cut interest rates, a concern that El-Erian shares. But the scandal advanced by the Trump administration over Powell's oversight of a $2.5 billion office renovation is not part of El-Erian's critique. El-Erian, who has been an inflation hawk for nearly all of the 2020s, largely agrees with the White House on inflation, even if they may be coming at it from different angles. Trump likely wants rate cuts as a way to spur the economy ahead of the 2026 elections, although Trump demanded rate cuts in similar fashion in the last decade, when both he and Powell were in their first terms. The cuts that eventually resulted surprised economists as inflation stayed under control for a time—but the surge in 2021 was the biggest since the early 1980s. El-Erian was on the record then and now about saying that Powell undermined the Fed's credibility on inflation throughout this episode. On Tuesday, he stated that if Powell were a CEO in the corporate world, he would have already been forced out over the central bank's recent stumbles. Among the missteps: the Fed's much-derided assertion in 2021–2022 that inflation was 'transitory,' which delayed rate hikes and contributed to price spikes; the 2022 'insider trading' scandal involving several senior Fed officials; and the 2023 banking crisis around the collapse of Silicon Valley Bank, which prompted what El-Erian termed a 'damning' internal report. In the first regard, El-Erian was often critical of Powell's reference to 'transitory' inflation, calling it a 'protracted gross mischaracterisation' in a December 2022 op-ed for the Financial Times. At that time, Powell was awaiting an Inspector General report on stock trading during the pandemic by two central bank governors. They were ultimately cleared, but the watchdog chastised both of them—and indirectly Powell—for undermining public confidence in the central bank, the same topic with whic El-Erian is still concerned. Although Powell was never accused of wrongdoing regarding the trading controversy, the episode led to stricter rules for central bank leaders and further eroded public confidence. Finally, the collapse in Silicon Valley Bank was unrelated, but chief regulator Michael Barr criticized lax oversight in an April 2023 report, arguing that it was partially responsible for one of the biggest banking failures in American history. El-Erian, former CEO of PIMCO and current president of Queen's College, Cambridge, told Axios and other outlets that Powell should bow out to defend the credibility and autonomy of the central bank. 'If your objective is to protect the independence of the central bank,' he told Axios, 'then it's better that he step down than he stays and the attacks multiply.' El-Erian warned that further assaults could undermine trust in the Fed with serious economic consequences. A 'lame duck' chair, and more attacks to come Powell, whose term expires in May 2026, is in a weakened position, El-Erian argued. The announcement of his replacement is expected by year end, and with a limited ability to steer policy, he is essentially a 'lame duck.' El-Erian argued that continuing attacks—regardless of their origin—will escalate so long as Powell remains in the role, increasing the risk of lasting reputational harm to the Fed. Treasury Secretary Scott Bessent's comments on Monday, calling for an examination 'of the entire Federal Reserve institution,' only heightened El-Erian's concerns. 'That is a red flag,' he said, suggesting the administration is widening its criticism beyond Powell to target the Fed itself. El-Erian predicted that if these political threats to central bank independence persist, markets could see a weaker dollar, higher interest rates, and a more volatile yield curve—destabilizing the economy further. Independence versus political pressure Trump's criticism of Powell has also expanded to the cost and management of the Fed's $2.5 billion renovation of its historic Washington, D.C. headquarters. Trump and his administration have accused Powell of mismanaging the project and potentially violating oversight rules, describing the renovations as 'ostentatious' and possibly 'fraudulent.' Specific complaints have included claims about luxury features such as rooftop gardens, private dining rooms, and executive elevators—many of which Powell refuted as either standard building updates or mischaracterizations by the administration. Trump has suggested that Powell's handling of the office renovation could be sufficient grounds for removal, although no evidence of fraud has been presented. In contrast, economist El-Erian's opinion of the real scandal is based on institutional credibility and internal scandals. El-Erian points to a series of reputational crises under Powell's leadership, with special emphasis on a high-profile insider trading scandal involving several senior Fed officials. In 2021 and 2022, some key regional Fed presidents were revealed to have been trading securities during periods when they had privileged policy information. Although Powell himself was cleared of wrongdoing by an independent watchdog, El-Erian argues that these scandals have eroded public confidence and harmed the Fed's credibility. The economist emphasized that the best outcome would be for the attacks to cease and for Powell to serve out his term in peace—though he considers that highly unlikely. El-Erian said the best-case scenario is for Powell to stay and attacks on the Fed to end, but he doesn't see that happening, making clear his conviction that a voluntary departure by Powell could help stem the tide and limit further damage. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Trump says Fed's Powell will be out in 8 months, calls him 'numbskull'
Trump says Fed's Powell will be out in 8 months, calls him 'numbskull'

Khaleej Times

time4 hours ago

  • Business
  • Khaleej Times

Trump says Fed's Powell will be out in 8 months, calls him 'numbskull'

US Federal Reserve Chair Jerome Powell is a "numbskull" who has kept interest rates too high, but he will be out in eight months, President Donald Trump said at a news conference on Tuesday. "I think he's done a bad job, but he's going to be out pretty soon anyway. In eight months, he'll be out," he said from a meeting at the White House with Philippine President Ferdinand Marcos Jr. Powell's term as Fed chair runs through May 15, and he has repeatedly said he will not leave the post early. Eight months run until mid-March, and it was not immediately clear why Trump picked that time frame. Trump has been hammering at Powell for months for not cutting rates and has frequently raised the possibility of ousting him, while also saying that firing him would be "unlikely." On Tuesday Trump repeated his view that the policy rate should be 3 percentage points lower than it is. The central bank's Federal Open Market Committee meets next week and is nearly universally expected to leave the policy rate in its current range of 4.25%-4.50% as policymakers wait to see how inflation and employment react to tariffs. "Our economy is so strong now, blowing through everything. We're setting records," Trump said. "But you know what? People aren't able to buy a house because this guy is a numbskull. He keeps the rates too high, and is probably doing it for political reasons." Treasury Secretary Scott Bessent, at the same meeting, trained his sights on the Fed for its non-monetary operations, again calling for a big internal investigation. White House officials have recently raised questions about a $2.5 billion renovation of two Fed buildings in Washington which they say are inappropriately lavish. "The Fed has had big mission creep, and that's where a lot of the spending is going," Bessent said. "That's where, why they're building these new, or refurbishing these buildings, and I think they have got to stay in their lane." The Fed counters that the buildings had severe safety and efficiency shortcomings that needed to be addressed.

BOJ warns of risks to economy, says rate-hike path on course
BOJ warns of risks to economy, says rate-hike path on course

Reuters

time4 hours ago

  • Business
  • Reuters

BOJ warns of risks to economy, says rate-hike path on course

KOCHI, Japan, July 23 (Reuters) - Bank of Japan Deputy Governor Shinichi Uchida said risks to economic activity and prices were skewed to the downside due to "extremely high" uncertainty over trade policy, even as he reiterated the central bank's readiness to proceed with further interest rate hikes. Uchida's remarks came hours after U.S. President Donald Trump announced a trade deal with Tokyo, a move that will likely ease some concerns over Japan's economic outlook. "Uncertainties surrounding each country's trade policy, and the effect on domestic and overseas economies, remain extremely high. As such, risks to economic activity and prices are skewed to the downside," Uchida said on Wednesday in a speech to business leaders in Kochi, southwestern Japan. "The BOJ needs to adjust monetary policy to best balance upside and downside risks from the perspective of maintaining economic and price stability," he added. The remarks from Uchida, who is known to deliver strong hints on the policy outlook, come ahead of the BOJ's July 30-31 rate-setting meeting when the board will issue a quarterly report with new growth and inflation projections. Sources have told Reuters the BOJ's report will warn of uncertainty over the impact of U.S. tariffs, but may offer a less gloomy view on the near-term hit to Japan's economy than three months ago when market volatility was at its peak. If some progress is made in Trump's trade negotiations with other countries, Japanese companies will likely enjoy strong profits and continue hiking wages, Uchida said. "But if the negative impact of tariff policies turns out to be greater or more prolonged than expected, the wage-hike trend seen in the past few years could weaken," he said. While warning of risks to economic growth, Uchida said inflation was running hotter than initially expected as rises in food costs were spreading beyond the price of rice. "This suggests that, at least with regards to food prices, firms' price-setting behaviour has changed significantly compared to the past," Uchida said, adding that rising food costs may have a relatively strong influence on households' inflation expectations. The BOJ expects underlying inflation, or price rises driven by strength in domestic demand, to reach its 2% target around the latter half of fiscal 2026 through 2027, he said. While media reports that Prime Minister Shigeru Ishiba may step down could add to political uncertainty, receding worries about a U.S.-Japan trade deal led some analysts to predict the chance of another rate hike by the end of this year. "The trade deal with the U.S. announced today removes a key downside risk to Japan's economy," said Marcel Thieliant, head of Asia-Pacific at Capital Economics. "And while the potential resignation of Ishiba creates political risks, our conviction that the Bank of Japan will resume its tightening cycle before the end of the year has risen," Thieliant said. The BOJ exited a decade-long, radical stimulus programme last year and raised short-term interest rates to 0.5% in January on the view that Japan was on the cusp of sustainably hitting its 2% inflation target. While the central bank has signalled its readiness to raise rates further, concerns about the economic fallout from higher U.S. tariffs forced it to cut its growth forecasts in May and complicated decisions around the timing of the next rate increase. Key to the BOJ's rate-hike timing would be whether firms will continue to hike wages next year despite U.S. tariffs, and help underpin economic growth, analysts say. A Reuters poll showed a majority of economists expect the BOJ to raise its key interest rate again by year-end, though most expect the bank to stand pat at this month's meeting.

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