Mortgage rates today remain high by historic standards, but slightly lower than the summer’s peak. Still, high borrowing costs and growing buyer uncertainty are pushing more homebuyers to walk away from deals, reflecting deeper cracks in the housing market.
Current mortgage rates as of September 3, 2025
Zillow Home Loans reports the following rates:
- 30-year fixed: 6.375% (APR 6.537%)
- 15-year fixed: 5.500% (APR 5.765%)
- 20-year fixed: 6.125% (APR 6.350%)
- 30-year FHA: 6.000% (APR 6.673%)
- 30-year VA: 6.125% (APR 6.386%)
- 7-year ARM (adjustable): 6.250%
Today’s slight dip from recent months offers some relief, but rates remain more than double the historic lows seen during the pandemic.
Cancellations rise as buyers get cold feet
The real estate frenzy of 2021 has flipped into hesitation. More than 15% of home purchase agreements fell through in July, the highest rate for that month since Redfin began tracking in 2017. Some cities saw even higher fallout rates:
- San Antonio, TX: 22.7%
- Fort Lauderdale, FL: 21.3%
- Jacksonville, FL: 19.9%
- Atlanta, GA: 19.7%
- Tampa, FL: 19.5%
With inventory climbing and mortgage rates hovering above 6%, buyers are negotiating harder—and walking away faster.
Why buyers are backing out
Several factors are fueling the cancellations:
- Higher monthly payments: A typical buyer today pays hundreds more per month compared to someone who locked in a 3% rate just a few years ago.
- Slower market = more options: With listings up nearly 25% year-over-year, shoppers have the luxury of taking their time and being selective.
- Incentives from builders: New construction homes often come with steep incentives like mortgage rate buydowns—pressuring existing home sellers to compete.
One agent summed it up: “If they don’t like this one, they can go to the next.”
How buyers can still get a better rate
Despite the market’s uncertainty, there are still ways to lower your mortgage rate:
- Improve your credit score
- Make a larger down payment
- Keep your debt-to-income ratio low
Zillow’s BuyAbility tool also offers customized rate estimates based on your financial profile.
What’s next for rates and the housing market?
The housing market’s next move depends on a few key factors:
- Federal Reserve policy: If inflation eases and the Fed signals a rate cut, mortgage rates could drift lower.
- Consumer confidence: Right now, hesitation and economic anxiety are keeping many buyers on the sidelines.
- Seller adjustments: Many homeowners are still pricing like it’s 2021. As more fail to sell, price cuts could become more common.
Inventory is beginning to tighten again, but unless borrowing gets cheaper, the market may stay sluggish through 2026.