Housing News

Mortgage Rates Just Fell by More Than They Have in a Year

Attention homebuyers and homeowners: There’s more good news when it comes to mortgage interest rates.

Rates keep falling. They experienced the largest weekly drop in the last year, according to Freddie Mac data.

Mortgage rates averaged 6.35% for 30-year, fixed-rate loans in the week ending Sept. 11, according to Freddie Mac. Last week, rates averaged 6.5%.

Rates have now fallen by more than a fifth of a percentage point in two weeks. They haven’t been this low since Oct. 10, 2024.

This recent decline seems to be based on the expectation that the U.S. Federal Reserve will soon cut its benchmark rate. While the Fed’s rates and mortgage rates are different, they tend to move in the same direction. So, as the market anticipates a Fed cut, mortgage rates are coming down.

That’s likely to be well received by homebuyers struggling with affordability and homeowners who may be looking to refinance their home loan.

Freddie Mac Chief Economist Sam Khater noted homebuyers “have noticed” that rates are moving in the “right direction,” leading to an influx in purchase mortgage applications.

That provides further evidence that the market is shifting in favor of homebuyers.

There are more homes on the market, giving buyers more choices. Active listings increased by 20.9% year-over-year in August, according to Realtor.com.

Meanwhile, home prices appear to have plateaued. The national median list price was unchanged in August at $429,990, according to Realtor.com.

Add in that more than 20% of home listings saw price cuts and buyers are sitting pretty in quite a few parts of the country.

“The drop below 6.5% could have an important psychological effect,” said Bright MLS Chief Economist Lisa Sturtevant in a statement. The multiple listing service covers the mid-Atlantic region. “Buyers who are not strictly priced out of the market could be enticed this fall as they see rates drop below the 6.5% threshold.”