Mortgage rates are down to their lowest averages since October 2024.
As of Thursday, the 30-year, fixed-rate mortgage averaged 6.58%, according to mortgage giant Freddie Mac, which buys loans from banks, bundles them into securities and sells them. The decrease marks the fourth consecutive weekly decline.
The 15-year, fixed-rate mortgage averaged 5.71% as of Thursday.
Daily rates — more volatile than weekly measures — were also on the decline as of Wednesday afternoon, when the 30-year, fixed-rate mortgage had decreased to 6.53% and the 15-year, fixed-rate mortgage had fallen to 5.9%.
September rate cut could be boon for mortgage market
The recent trend in mortgage rates mirrors what unfolded at the end of last summer.
In 2024, mortgage rates broadly declined during the summer months. It was mostly driven by expectations that the Federal Reserve would cut interest rates in September.
While the central bank doesn’t technically control the mortgage market, the rates it does set govern what banks charge to borrow from one another overnight — and it acts as a powerful benchmark for many lenders.
Now, the Fed could be on track for another September rate cut even though leaders at the central bank had previously suggested they’d be waiting longer to make any policy decisions. In fact, at the Fed's last meeting in late July, two members of the board voted against the rest of the group's decision to hold interest rates steady.
New data about inflation and the job market — the most important indicators for the Fed — showing that the economy is slowing, could be enough to push the bank to make a decision earlier than expected. And that shift in expectations has been enough to move the mortgage market, according to Matthew Graham, chief operating officer of Mortgage News Daily.
“Rates moved lower in concert with Fed rate cut expectations,” he wrote in a Wednesday blog post. “For all the time we spend pushing back on the belief that the Fed dictates mortgage rates, this is the one time that there's a sort of exception.”
Of course, there are still risks to inflation, especially as markets wait to see how the White House's tariff policy plays out.
If those expectations and data about the economy hold, though, there could be more downward pressure on mortgage rates, Sean Salter, a real estate researcher and finance professor at Middle Tennessee State University, said in a Bankrate survey.
“If economic data weakens and if inflation stays manageable, we could see further improvement, and every little bit helps,” Salter said.
