Seeing a third week of declines and the lowest point since October, decreasing mortgage rates saw purchase applications and especially refinance applications surge this past week but continued uncertainty over inflation and the economy could still be keeping buyers on the sidelines, mortgage watchers say.
According to the latest Primary Mortgage Market Survey® (PMMS®) released by Freddie Mac Thursday, the 30-year fixed-rate mortgage (FRM) averaged 6.58%, a decrease of 5 basis points from last week’s average of 6.63%.
“Mortgage rates fell to their lowest level since October,” said Sam Khater, Freddie Mac’s chief economist. “Purchase application activity is improving as borrowers take advantage of the decline in mortgage rates.”
Realtor.com Sr. Economist, Joel Berner commented, “The Freddie Mac 30-year fixed mortgage rate fell…this week despite concerns about inflation data not showing the price moderation many had hoped for. Last week, the rate fell to its lowest level since April as a result of the weak employment report that led many to anticipate interest rates being cut by the Federal Reserve at its upcoming meeting in September.”
Berner noted that this week, a different economic indicator slightly slowed the mortgage rate’s descent. Inflation data released on Tuesday showed consumer price growth maintaining pace by some measures, such as the topline inflation rate figure, and accelerating by others, like core inflation (which excludes volatile energy and food prices).
“Had inflation come in under expectations, steady prices at the same time that job growth is stalling would be a doubly clear message that interest rates ought to come down; instead, the call to action for the Fed is a bit less loud and clear,” Berner said. “This week’s modest mortgage rate reduction is a reflection of the expectations for a Fed cut next month balanced with caution about inflation.”
He added that homebuyers who have been relegated to the sidelines by high financing costs got some encouragement in the past two weeks, but it remains to be seen if it’s enough to get more of them back in the game.
“But if the Federal Reserve does indeed cut interest rates next month, they could fall further and spur on more activity in the housing market to end 2025,” said Berner.
This week’s numbers:
- The 30-year FRM averaged 6.58% as of August 14, 2025, down from last week when it averaged 6.63%. A year ago at this time, the 30-year FRM averaged 6.49%.
- The 15-year FRM averaged 5.71%, down from last week when it averaged 5.75%. A year ago at this time, the 15-year FRM averaged 5.66%.
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