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yesterday

Mortgage Rates Drop to 6.5%, Lowest Since Last October, as Markets Price In Fed Cut

Markets have already pulled rates lower ahead of the expected Fed cut.

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FILE - A "For Sale" sign is displayed outside a home on Friday, July 11, 2025, in Portland, Ore. (AP Photo/Jenny Kane, File)

Overview

  • Freddie Mac reports the average 30-year fixed mortgage rate fell to 6.5% from 6.56% a week earlier, marking the lowest level since last October.
  • Traders see a high probability of a 25-basis-point Federal Reserve cut on Sept. 17, a view reinforced by Chair Jerome Powell’s Jackson Hole remarks and weaker labor data.
  • Mortgage Bankers Association data show total applications down 1.2% for the week ending Aug. 29, with purchase applications off 3% and refinances up 1%.
  • Refinance activity is being led by FHA and VA loans as FHA rates average about 30 basis points below comparable conventional loans, lifting refis to 46.9% of applications.
  • Analysts note mortgage pricing moves with the 10-year Treasury and lender expectations, and longer-term affordability pressures persist despite recent rate relief.