Mortgage Rates Explained: What’s Happening in 2025 and What You Should Do

Mortgage rates were the buzzword of 2024—and in 2025, they continue to be a hot topic for buyers, sellers, and homeowners across Central Oregon. Whether you're dreaming of your first home in Bend or debating a refinance on your Redmond rental, understanding the mortgage landscape is critical.

So what’s really happening with rates in 2025—and how should you respond? Let’s break it down.

📉 Where Are Mortgage Rates Now?

After hitting multi-decade highs in late 2023, rates have gradually softened through the first half of 2025. As of June, average 30-year fixed mortgage rates are hovering between 6.25% and 6.75%, down from peaks near 8% in 2023 but still higher than the historic lows we saw in 2020–2021.

The Federal Reserve has paused interest rate hikes and may begin gradual rate cuts if inflation continues to cool. That’s good news for buyers—but it's important to keep perspective: today’s rates are still historically normal.

🧭 What’s Driving Mortgage Rates in 2025?

Several key factors are influencing today’s mortgage rate environment:

• Federal Reserve Policy: The Fed isn’t cutting aggressively, but rate stability is easing mortgage markets.

• Inflation Trends: Slower inflation means less pressure on interest rates.

• Economic Signals: With moderate job growth and steady consumer spending, lenders are cautiously optimistic.

• Investor Confidence: Global uncertainty (like election cycles or international tensions) can push investors toward or away from mortgage-backed securities, impacting rates.

🏠 What Should You Do if You’re Buying?

✅ Get Pre-Approved Now

Even if you're months away from buying, know your numbers now. Rates and inventory can shift fast.

✅ Compare Lenders

Different banks, credit unions, and brokers offer varying rates and closing costs—comparison shopping matters more than ever.

✅ Consider Rate Buy-Downs

Some sellers (especially builders or motivated sellers in Bend or Redmond) may offer rate buy-downs as an incentive—reducing your monthly payment.

✅ Don’t Wait for a Perfect Rate

Trying to "time" the market perfectly is risky. If a home fits your needs and you can afford it now, you can always refinance later if rates drop.

🏡 What If You’re Selling in Central Oregon?

• Be Strategic About Pricing: Higher rates impact buyer budgets—overpricing in this market can lead to longer days on market.

• Highlight Affordability Perks: If your home qualifies for seller concessions (like buy-downs), advertise them.

• Target Relocation Buyers: Many Bend and Sisters buyers are coming from pricier markets—so they may have more flexibility despite rates.

🔄 Should You Refinance in 2025?

If you locked in a rate under 4%, you’re likely better off staying put. But if you bought in 2022–2023 when rates were high, refinancing now could save you hundreds per month.

Talk to a mortgage advisor if:

• Your current rate is over 7%

• You’ve improved your credit

• You have built 20% equity and can remove PMI

📊 Central Oregon Snapshot: Mortgage Rates & Market Impact

• First-time buyers are still struggling with affordability—but down payment assistance and homes under $500K (especially in Redmond, La Pine, and Prineville) are easing the pressure.

• Move-up buyers are staying put longer due to “rate lock-in,” which is slowing inventory in mid-tier Bend neighborhoods.

• Investors are watching rates closely, but strong rental demand in tourist areas keeps interest high—even with higher borrowing costs.

Mortgage rates in 2025 are more stable, but not “cheap.” The good news? With smart planning and a local expert on your side, you can still buy, sell, or refinance confidently in Central Oregon.

FAQs

Q: Will rates drop significantly in 2025?

A: Modest drops are expected, but we’re unlikely to see the 3% range again anytime soon. Expect small changes over time, not a sudden plunge.

Q: Should I wait for lower rates before buying?

A: It depends on your goals. If prices keep rising and rates only fall slightly, waiting could cost you more. Focus on affordability, not just interest rates.

Q: What’s a good mortgage rate today?

A: That depends on your credit, down payment, and lender—but mid-6% is average for strong borrowers. Shop around!

Q: Can I negotiate with lenders?

A: Yes! Lenders may offer discounts, lower fees, or rate-matching—especially in a competitive market.