Sliding down another two basis points, the average 30-year fixed mortgage rate drop this week brought the figure to a 10-month low.
According to the latest Primary Mortgage Market Survey® (PMMS®) released by Freddie Mac Thursday, the 30-year fixed-rate mortgage (FRM) averaged 6.56% a decrease from last week’s average of 6.58%.
“Mortgage rates are at a 10-month low,” said Sam Khater, Freddie Mac’s chief economist. “Purchase demand continues to rise on the back of lower rates and solid economic growth. Though many potential homebuyers still face affordability challenges, consistently lower rates may provide them with the impetus to enter the market.”
Realtor.com’s Chief Economist Danielle Hale commented, “After peaking in May 2025, mortgage rates have generally pulled back, modestly and unevenly. This helped existing home sales rise modestly in July, but new home sales have remained sluggish and pending home sales were also lackluster in July.”
Hale noted Federal Reserve Chair Powell’s comments setting the stage for a Fed rate cut in September, assuming inflation and labor market data register as expected.
“This should help keep mortgage rates moving modestly lower at least until mid-September,” she noted. “A Fed rate cut will move today’s restrictive policy a touch closer to neutral, meaning that the Fed is easing off the monetary brakes in light of slower job growth data while still maintaining a watchful eye on inflation.”
What happens after the Fed’s rate cut, however, will depend on the data, Hale noted. While longer-term rates, like mortgage rates, are influenced by the short-end of the yield curve that the Fed adjusts, they are also affected by economic growth, labor market and inflation expectations over the mid-to-longer term.
“Mortgage rates will continue to decline if data suggest that the labor market is weakening further or if inflation is lower than expected,” she added. “Expectations are quite high for inflation which is likely to be variable as prices adjust to tariffs. For this reason, I don’t expect rates to be quite as sensitive to higher inflation readings as we’ve seen over the past few years. The Fed is still committed to a 2% inflation target, but is expecting at least a one-time reset in prices as tariffs pass through.”
She said for homebuyers, today’s data offers a bit of relief and we’re likely to see similar conditions in the next month or so, but “with the outlook dependent on incoming data, it’s harder to say where mortgage rates might be in a few months. Shoppers who are ready would do well to take advantage of today’s trends.”
This week’s numbers:
- The 30-year FRM averaged 6.56% as of August 28, 2025, down from last week when it averaged 6.58%. A year ago at this time, the 30-year FRM averaged 6.35%.
- The 15-year FRM averaged 5.69%, unchanged from last week. A year ago at this time, the 15-year FRM averaged 5.51%.
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