Mortgage Interest Rates Today: Mortgage Rates Stay Put—for Now—While Fed’s Next Step Looms

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Mortgage rates held steady Thursday after dropping to a 10-month low the week before, reflecting the bond markets’ growing confidence that a Federal Reserve interest rate cut might be imminent.

The average rate on 30-year fixed home loans was 6.58% for the week ending Aug. 21, same as the previous week, according to Freddie Mac. Rates averaged 6.46% during the same period in 2024.

“The 30-year fixed-rate mortgage remained flat this week,” says Sam Khater, Freddie Mac’s chief economist. “Over the summer, rates have come down and purchase applications are outpacing 2024, though a number of homebuyers continue waiting on the sideline for rates to further decrease.”

Financial markets widely expect the Fed’s policymakers to slash the central bank’s benchmark rate at their next FOMC meeting on Sept. 17 and appear to be pricing in that outcome, but Realtor.com® Senior Economist Jake Krimmel suggests that it might be premature.

According to Krimmel, recent macroeconomic data have been mixed, from a weak jobs report pointing toward easing, to an uptick in core inflation in July making a rate cut less certain.

Markets will look to Fed Chair Jerome Powell’s final keynote address in Jackson Hole, WY, on Friday to find out whether a rate cut is in the offing.

Since December 2024, Powell and the Fed governors have kept the central bank’s key interest rate steady at a 4.25% to 4.5% range, despite facing mounting pressure from President Donald Trump to cut rates.

As recently as Tuesday night, Trump once again publicly lashed out at Powell over the Fed’s rate policy.

“Could somebody please inform Jerome ‘Too Late’ Powell that he is hurting the Housing Industry, very badly? People can’t get a Mortgage because of him,” the president fumed. “There is no Inflation, and every sign is pointing to a major Rate Cut. “Too Late” is a disaster!”

Futures traders are currently assigning an 85% probability to a quarter-point rate reduction in September and will be closely following Powell’s remarks at the annual Fed conference—his last one as chairman—for hints of what’s to come.

For the housing market, rates hovering near levels not seen since October 2024 could offer a much-needed boost to buyer sentiment.

“It’s been a cruel summer for buyers, sellers, and builders alike, as existing– and new-home sales remain slow,” says Krimmel. “But a combination of lower rates and easing economic uncertainty could be enough to jumpstart the fall market by boosting buyers’ purchasing power and giving them the confidence to get off the sidelines.”

It’s worth noting, however, that the Fed does not set mortgage rates directly, and a rate cut won’t automatically guarantee relief for homebuyers, given that borrowing costs are closely tied to a combination of factors, including 10-year Treasury yields, inflation expectations, and broader market dynamics.

How mortgage rates are calculated

Mortgage rates are determined by a delicate calculus that factors in the state of the economy and an individual’s financial health. They are most closely linked to the 10-year Treasury bond yield, which reflects broader market trends, like economic growth and inflation expectations. Lenders reference this benchmark before adding their own margin to cover operational costs, risks, and profit.

When the economy flashes warning signs of rising inflation, Treasury yields typically increase, prompting mortgage rates to go up. Conversely, signs of falling inflation or weakness in the labor market usually send Treasury yields lower, causing mortgage rates fall.

The mortgage rates you’re offered by a lender, however, go beyond these benchmarks and take some of your personal factors into account.

Your lender will closely scrutinize your financial health—including your credit score, loan amount, property type, size of down payment, and loan term—to determine your risk. Those with stronger financial profiles are deemed as lower risk and typically receive lower rates, while borrowers perceived as higher risk get higher rates.

How your credit score affects your mortgage

Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you’ll receive. The higher the credit score, the lower the interest rate you’ll qualify for.

The credit score you need will vary depending on the type of loan. A score of 620 is a “fair” rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.

Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates.

Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. They want to make sure you’re able to pay back the loan.