Are Mortgage Rates Finally Turning the Corner in 2025?

Mortgage rates in the U.S. have slipped to their lowest levels seen all year, offering a glimmer of hope for both buyers and homeowners. According to Freddie Mac, the average rate for a 30-year fixed mortgage hit 6.50% in the week ending Thursday, a slight decline from the 6.56% recorded just one week earlier. On a day-to-day basis, the rate dipped even further to 6.49%, marking an eleven-month low.

The 15-year fixed mortgage also saw a small decline, averaging about 5.6% with daily rates hovering around 5.85%. While these numbers are encouraging, they remain slightly above figures from a year ago, when 30-year rates averaged 6.35%. For many, the decline sparks optimism, yet the real estate market has not shown a surge of activity in response. Mortgage applications have actually fallen for three consecutive weeks, according to the Mortgage Bankers Association, highlighting the reality that affordability challenges remain a major barrier despite lower rates.

Industry experts remain cautious about where rates are heading next. Freddie Mac’s Chief Economist Sam Khater noted that falling rates are fueling optimism, but that has not yet translated into demand. Bob Broeksmit, MBA’s president and CEO, emphasized that affordability pressures are keeping many potential buyers on the sidelines. Meanwhile, Jeffrey Ruben, President of WSFS Mortgage, explained that he does not expect a substantial drop in mortgage rates before year-end, citing bond market hesitations and ongoing inflation concerns. Anthony Kellum, CEO of Kellum Mortgage, echoed that sentiment, saying any significant relief will depend on clearer direction from the Federal Reserve’s policies.

While the recent dip is encouraging, it may not be the turning point buyers have been waiting for. Rates are at their lowest point of 2025 so far, but the improvement has been modest. For those considering a purchase or refinance, it is wise to stay prepared and realistic, because lower rates alone may not be enough to overcome today’s affordability challenges.

Source: Homes.com, “Mortgage rates sink again to 2025 low,” by Moira Ritter, September 4, 2025