Mortgage Rates Hit Lowest Level Since October 2024

Washington, D.C. — Mortgage rates fell to their lowest level since October 2024, offering new hope to potential homebuyers. According to Freddie Mac, the average 30-year fixed mortgage rate dropped to 6.35% for the week ending September 11, down from 6.50% the previous week.

This marked the sharpest weekly decline in mortgage rates for 2025, as borrowing costs have likely dropped due to anticipations surrounding a potential rate cut by the Federal Reserve. Zillow senior economist Kara Ng stated, “In anticipation that the Federal Reserve will cut interest rates aggressively in the coming months, investors have driven mortgage rates lower.”

The Federal Reserve does not set mortgage rates directly; instead, they tend to follow the 10-year Treasury yield, which has recently decreased to its lowest levels since April 2025. This drop came amid concerns that the U.S. economy might be deteriorating more rapidly than anticipated, following the release of new labor market data.

Despite these lower rates, many potential buyers have remained on the sidelines due to high housing prices, rising insurance costs, and previously elevated mortgage rates. However, the Mortgage Bankers Association reports that demand for mortgages spiked last week to a three-year high, with applications for both purchases and refinancing increasing.

However, affordability may still be a concern. Lisa Sturtevant, chief economist at Bright MLS, noted that significant affordability improvements require both reduced mortgage rates and slower or declining home prices. She emphasized, “For real affordability gains, we need to see both a drop in mortgage rates and much slower price growth, or even home price declines.”n

Some analysts believe a further drop below 6.5% in mortgage rates could have a psychological impact, encouraging buyers to re-enter the market. Erik Schmitt, an executive at Chase Home Lending, commented, “It’s nearly impossible to predict exactly how rates will fare out in the future—mortgage rates don’t always react predictably to Fed decisions.”

The market is already reflecting expectations of a rate cut in September, but buyers should remain cautious, as a further decline in rates is not assured, regardless of Federal Reserve actions.