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The decline in mortgage interest rates continued this week, giving both homebuyers and owners looking to refinance a reason for optimism following years of elevated rates.
The average rate on a 30-year mortgage term fell from 6.56% to 6.50%, marking its lowest level since October 2024, new FreddieMac data released Thursday showed. Rates on a 15-year mortgage also declined, from 5.69% to 5.60%, marking the lowest point there since the week of October 10.
And the drop isn’t new. Mortgage rates, overall, have been slowly but steadily declining for much of 2025, including a five-week decline earlier this summer. They’re also well-positioned to decline this month, perhaps even sooner than expected. Below, we’ll break down some of the reasons behind the decline as well as what homebuyers should be doing now amid these encouraging developments.
Start by seeing how low a mortgage rate you could secure here.
Why are mortgage rates falling now?
Simply put: A rate cut courtesy of the Federal Reserve appears imminent and mortgage lenders are responding by lowering their rate offers. With a cut in the amount of 25 basis points widely expected for when the central bank concludes its next meeting on September 17, mortgage rates have preemptively responded.
But that’s not unprecedented. Mortgage rates here plunged to a two-year low last September, before the Fed issued a rate reduction. Banks often lower rates in anticipation of a cut. But with multiple meetings left on the 2025 calendar after September, further reductions could be offered, lowering mortgage rates as a result. New unemployment data could also spark big cuts.
The 10-year Treasury yield also plays a significant role here and as treasury notes dip, so will mortgage rates. And that’s been declining in recent weeks, too.
Expectations surrounding a rate cut, the likelihood of one being issued and a cooling 10-year Treasury yield, then, have combined to lower mortgage rates. Perhaps it’s not as low as buyers would prefer and perhaps there’s more that needs to be done to get rates below 6% again. But the trend here is a cooler one and one that should be approached strategically.
See what mortgage rates lenders are offering online today.
What homebuyers should be doing now
Sitting idle isn’t an option for those interested in buying a home now. Lower rates, after all, tend to entice more buyers to the market and thus increase competition for what can be limited inventory, depending on your location. If you’re considering a purchase, take the following steps now:
- Check your credit report: Inaccuracies or outdated information could be hurting your credit score, which you’ll need as high as possible to secure the lowest mortgage rates.
- Get pre-approved: A pre-approval in hand will show sellers that you’re serious about buying – and that you have the financial means to support any offers you submit.
- Research real estate agents: An experienced, professional real estate agent can be priceless in any climate but particularly today’s unusual one with high prices and cooling rates.
- Calculate your budget: A home is likely the biggest purchase you’ll ever make so it’s critical that you calculate your budget accurately and realistically against today’s rates, not what may or may not be available in the future.
The bottom line
Mortgage interest rates just fell to an 11-month low and are likely to continue to fall further in the weeks ahead. Thanks to Fed rate cuts, a lower Treasury yield and lender expectations, these lower rates should be exploited by buyers by making select moves now. Remember, it was only two years ago when mortgage rates were at their highest point in decades, so this affordable window of opportunity may not last indefinitely. Be strategic and smart, then, while it’s readily available.