Mortgage Rate Update: March 20th, 2025

This update is based on insights provided by Mark Glauner, Loan Professional at Augusta Financial.

Understanding The Recent Interest Rate Movement

The Fed has chosen to hold interest rates steady for now but anticipates reducing them twice in 2025. This announcement has influenced the mortgage bond market, which could soon lead to lower mortgage rates.

What Does This Mean?

Mortgage bonds and mortgage rates have an inverse relationship—when bond prices increase, mortgage rates tend to decrease. Recently, bond prices have gone up, which means mortgage rates could drop to around 5% if this trend continues.

Why Did the Ceiling Break?

Following comments from Fed Chair Jerome Powell, mortgage bond prices broke through a resistance level they had struggled to surpass. Why is this important? Lenders rely on these bonds to fund home loans. When bond prices rise, lenders don’t have to offer as much interest to attract investors, which helps bring mortgage rates down.

How Does This Align with Expected Rate Cuts?

Although the Fed hasn’t cut rates yet, investors—who buy and sell financial assets—make decisions based on what they anticipate will happen. If they expect rates to go down, they start buying bonds in advance, which pushes bond prices higher and mortgage rates lower, even before the Fed officially lowers rates. This is why mortgage rates can improve ahead of actual rate cuts.

Current Mortgage Rates (as of March 20, 2025)

According to Mark Glouner’s latest update:

• Conventional Loans: 6.625% (zero points), 6.375% (1 point)

• FHA Loans: 5.99% (zero points), 5.625% (1 point)

• VA Loans: 5.99% (zero points), 5.625% (1 point)

What Does ‘1 Point’ Mean?

If a loan option includes “1 point,” that means you pay extra upfront to secure a lower interest rate. One point equals 1% of the loan amount. For example, if you’re taking out a $400,000 loan, one point would cost $4,000. In exchange, your interest rate is reduced, which could save you money over time. If you’re wondering whether paying points is the right move for you, reach out to Mark Glouner for personalized advice.

What to Expect Moving Forward

If bond prices remain strong and the Fed follows through with rate cuts, mortgage rates could continue to decline, making it more affordable to buy or refinance a home. If you’re in the market, now is a good time to stay informed.

For More Information

For current mortgage rates and loan options, contact:

Mark Glouner

Loan Specialist

Augusta Financial

NMLS 260877 | CA DRE 1299857

📞 C: 661-406-5629

📠 F: 661-579-2835

📧 E: markglauner@gmail.com

This update is based on Mark Glouner’s March 20, 2025, rate update, with additional explanations for clarity.