Mortgage Refinance Rates Rise Amid Economic Concerns

Mortgage rates have shown mixed movements as of May 5, 2025, with average 30-year fixed rates for purchases edging slightly lower to around 6.70-6.78% while refinance rates have risen to approximately 6.88-6.91% amid ongoing economic uncertainty and labor market developments. The Federal Reserve is widely expected to hold its benchmark interest rate steady at its upcoming meeting, with traders assigning a roughly 95-97% chance of no change, though broader economic factors such as inflation, employment, and bond markets continue to influence mortgage rates more than the Fed's direct actions. Despite recent dips in rates, experts do not anticipate a refinancing boom similar to those seen in 2020-2021, as rates remain elevated and are unlikely to fall below 6% in the near term. Economic concerns, including potential policy impacts from the Trump administration and fears of a downturn, may prompt future Fed rate cuts, potentially driving mortgage rates lower by the end of 2025. Homebuyers are encouraged to shop around and lock in rates when financially ready, while homeowners considering refinancing should monitor the market for further rate drops. Mortgage covered bond auctions, such as those announced by Realkredit Danmark, continue to play a role in funding and rate-setting within the mortgage market.