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In the United States, interest rates for all mortgage types started to increase in 2021. This was due to the Federal Reserve introducing a series of hikes in the federal funds rate to contain the rising inflation. In the third quarter of 2025, the 30-year fixed rate dropped slightly, to **** percent. The rate remained below the peak of **** percent in the fourth quarter of 2023.

Why have U.S. home sales decreased?

Cheaper mortgages normally encourage consumers to buy homes, while higher borrowing costs have the opposite effect. As interest rates increased in 2022, the number of existing homes sold plummeted. Soaring house prices over the past 10 years have further affected housing affordability. Between 2014 and 2024, the median price of an existing single-family home risen by about ** percent. On the other hand, the median weekly earnings have risen much slower.

Comparing mortgage terms and rates

Between 2008 and 2024, the average rate on a 15-year fixed-rate mortgage in the United States stood between ****Ìý²¹²Ô»å **** percent. Over the same period, a 30-year mortgage term averaged a fixed-rate of between **** and **** percent. Rates on 15-year loan terms are lower to encourage a quicker repayment, which helps to improve a homeowner’s equity.