Mortgage rates saw their largest weekly decline in roughly a year, plummeting 15 basis points to the lowest average since October 2024.
The 30-year, fixed-rate mortgage averaged 6.35% in the week ended Thursday, according to mortgage giant Freddie Mac. At the same time, the 15-year, fixed-rate mortgage average declined to 5.5%.
On a daily basis, the 30-year, fixed-rate mortgage was unchanged from Wednesday afternoon. The 15-year, fixed-rate mortgage had climbed ever so slightly, by one-tenth of a basis point.
This week, daily mortgage rate movement is expected to be determined by two economic data reports: the producer price index released Wednesday and the consumer price index released Thursday.
The producer price data came in below expectations, which helped mortgage rates. And the consumer data showed that prices accelerated faster in August. Mortgage lenders had already adjusted for that news by Thursday afternoon, when daily mortgage rates decreased from a day earlier to 6.27%.
Will the rate slide continue?
The last two weeks have provided an onslaught of data about the economy — and reciprocal shifts in the mortgage market.
- Mortgage market sees strongest week of borrower demand since 2022
- Mortgage rates clock largest daily decline on heels of weak jobs report
The topline: The U.S. economy is weaker than previously thought, so it's expected that the Federal Reserve will lower interest rates next week, a move that would send ripples through markets and potentially put even more downward pressure on mortgage rates.
Last week, the 30-year, fixed-rate mortgage clocked its largest daily decline, falling to 6.29%. It was the largest daily drop since August 2024 and the lowest daily rate since October 2024.
It's notable, too, that this September bears some resemblance to last September. Around this time last year, mortgage rates nosedived, grazing the 6% threshold for a few weeks before the presidential election reignited market anxieties.
There are big differences this year — tariffs and a significantly weaker labor market, to name a few — but even so, the déjà vu of it all has some lenders hesitant to bet on this being the moment when mortgage rates finally fall and stay down.
Among those speculators is Jeffrey Ruben, president of WSFS home lending.
"I don't think we're going to see a substantial drop," he told Homes.com in an interview last week, noting that inflationary concerns could keep long-term interest rates — like the 30-year, fixed rate mortgage — higher for longer.
That said, uncertainty still dominates, and many historic norms no longer apply, so there's no way of telling exactly what comes next.
For now, though, borrowers seem to be taking advantage of lower rates, with more buyers moving to secure a mortgage and more owners seeking to refinance.
“Mortgage rates are headed in the right direction, and homebuyers have noticed, as purchase applications reached the highest year-over-year growth rate in more than four years," Freddie Mac CEO Sam Khater said in a statement Thursday.