States with Lowest Mortgage Rates as of July 25, 2025

States with Lowest Mortgage Rates as of July 25, 2025

Mortgage Rates Trends and State Differences

The Federal Reserve's monetary policies continue to shape the mortgage market, with analysts predicting that the 30-year mortgage rate could decline as low as 5% by 2028 if the Fed follows through on planned cuts [1]. As of July 25, 2025, the states with the lowest average 30-year mortgage rates range roughly from 6.72% to 6.86%, including New York, California, Pennsylvania, Massachusetts, New Jersey, Washington, and North Carolina [2]. Conversely, states with the highest averages—such as Alaska, West Virginia, Vermont, Wyoming, North Dakota, Mississippi, Delaware, and Nebraska—see rates from about 6.93% to 7.05% [2].

Lenders tend to offer lower rates in states where borrower risk is perceived as lower, such as those with higher average credit scores. Larger average loan sizes, typical in states with more expensive housing markets, can also influence rates, sometimes allowing lenders to offer slightly better terms due to economies of scale [1]. Regulatory environments at the state level impact lender operations and pricing models, and competition among lenders within a state usually helps push rates down [1]. Additionally, lenders' own risk tolerance and strategies may cause variation, with some being more aggressive in certain markets.

Different types of loans come with different rates and requirements. For instance, FHA 30-Year Fixed loans, often favored by first-time homebuyers, have lower down payment requirements and currently average 7.55% [1]. A 15-Year Fixed loan, with a shorter term, results in paying off the loan faster and saving on interest, with rates of 5.92% [1]. Adjustable-Rate Mortgages (ARMs), such as the 5/6 ARM, have a fixed rate for the first five years, then adjust every six months based on market conditions, with rates hovering around 7.35% [1].

To get a sense of what you can afford, use a mortgage calculator that factors in property taxes and homeowners insurance. It's also worth noting that a higher credit score generally leads to a lower interest rate [1]. A larger down payment can reduce the amount you need to borrow and signal to lenders that you're a lower-risk borrower [1].

The Fed is considering two rate cuts this year, but the timing and size are still under discussion [1]. Investing in turnkey real estate can help secure consistent returns with fluctuating mortgage rates [1]. If you're considering buying a home or investing in real estate, it's essential to stay informed about the latest mortgage rate trends and understand how they may impact your financial decisions.

References: [1] "Mortgage Rates Today" (2025). Retrieved from https://www.mortgagerates.com/ [2] "State-by-State Mortgage Rate Comparison" (2025). Retrieved from https://www.bankrate.com/mortgages/state-mortgage-rates/ [3] "Understanding Mortgage Rates and Their Factors" (2025). Retrieved from https://www.investopedia.com/terms/m/mortgagerate.asp [4] "Regional Differences in Mortgage Rates" (2025). Retrieved from https://www.freddiemac.com/research/insight/regional-differences-mortgage-rates

1. The Federal Reserve's planned cuts could potentially push 30-year mortgage rates as low as 5% by 2028.
2. As of July 25, 2025, states like New York and California have lower mortgage rates compared to states like Alaska and West Virginia.
3. Lenders offer lower rates in states with lower perceived borrower risk, higher average credit scores, and larger average loan sizes.
4. A 7.55% average rate is associated with FHA 30-Year Fixed loans, which are often popular among first-time homebuyers.
5. A 15-Year Fixed loan with an average rate of 5.92% allows faster loan repayment and less interest compared to the 30-year mortgage.
6. Adjustable-Rate Mortgages (ARMs) have rates that adjust every six months based on market conditions and currently hover around 7.35%.
7. Investing in turnkey real estate can provide consistent returns amidst fluctuating mortgage rates and is important to consider when making financial decisions regarding home buying or real estate investments.

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