After a long stretch of elevated mortgage rates, the housing market is finally showing signs of life. The average rate for a 30-year fixed mortgage dropped to about 6.77% in early July 2025—its lowest point in three months. That small decline sparked a nearly 10% jump in mortgage applications for the first week of July.
This uptick suggests that buyers are starting to feel more confident. Lower rates mean monthly payments become a little easier to handle, making homeownership feel within reach again. Plus, with housing inventory inching up and home price growth slowing, buyers have more options and more negotiating power than they’ve had in a while.
That said, the market still faces big challenges. Many homeowners are reluctant to sell because they’re “locked in” to their existing low-rate mortgages. This hesitation has kept home sales near historic lows and limited the overall supply of homes available.
Despite these hurdles, the recent rate drop offers a glimmer of hope. If mortgage rates continue to ease, we could see a more balanced market soon—one where buyers and sellers find better footing, and more people can finally make that leap into homeownership.