Mortgage rates drifted lower this week, hitting the lowest level since October 2024.
The 30-year fixed mortgage rate was 6.58% through Wednesday, according to Freddie Mac data, down from 6.63% a week earlier. Meanwhile, the average 15-year fixed mortgage rate was 5.71%, from 5.75% a week earlier.
Rates continued to move lower after fresh inflation data furthered Wall Street’s conviction that the Federal Reserve will cut benchmark interest rates in September. Mortgage rates aren’t directly controlled by the Fed, but they do move in response to expectations about future interest rate policy.
After spending much of 2025 stuck in a narrow range between 6.6% and 6.8%, mortgage rates are falling now after hiring data released in early August showed weak job growth in recent months. In response to the job weakness and data showing inflation in July was still sticky, but below economists’ expectations, traders see a 91% chance of the Fed dropping interest rates by 25 basis points next month.
Read more: When will mortgage rates go down?
While lower rates provide some relief to prospective homebuyers, they might not move much lower from here, Chen Zhao, head of economics research at Redfin, said in a statement.
“The mortgage rates that buyers can lock in today have already priced in the likelihood that the Fed will cut rates on Sept. 17,” Zhao said. “That means that mortgage rates are unlikely to drop any further when the Fed actually makes the expected cut. And the window to snag a mortgage rate in the mid-6s may be limited: Increased rate volatility is expected in the coming weeks as new economic data is released.”
So far, recent rate drops have done little to bring homebuyers off the sidelines, though refinancing activity did tick up. Refinancing applications jumped 23% through Friday from a week earlier, according to the Mortgage Bankers Association. Purchase activity, meanwhile, saw just a 1% increase week over week.
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