Residential Real Estate News
30-Year Mortgage Drops to 6.56 Percent in Late August, Lowest Since October 2024
U.S. mortgage rates eased slightly this week, reaching their lowest level in nearly 10 months, a development that could provide some relief to homebuyers after two years of elevated borrowing costs.
According to Freddie Mac's latest Primary Mortgage Market Survey, the average rate on a 30-year fixed mortgage slipped to 6.56% as of August 28, 2025, edging down from 6.58% a week earlier. While the decline is modest, it marks the lowest reading since late October 2024 and reflects a broader trend of gradual easing as financial markets continue to adjust to expectations of slower inflation and steadier economic growth.
The drop in rates has already begun to spark renewed interest from buyers. "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."
Even with this improvement, rates remain significantly higher than the ultra-low levels seen during the pandemic, when 30-year loans fell below 3%. Compared with a year ago, borrowing costs have only slightly increased--the 30-year fixed mortgage averaged 6.35% in late August 2024--underscoring how the housing market continues to operate in a higher-for-longer rate environment.
The average 15-year fixed-rate mortgage held steady at 5.69% this week, unchanged from the previous survey. A year earlier, the 15-year averaged 5.51%, highlighting the persistence of elevated financing costs across different loan terms.
The combination of marginally lower borrowing costs and still-strong economic fundamentals could give the U.S. housing market some momentum heading into the fall. Economists note, however, that affordability pressures remain a significant constraint. Elevated home prices, tight inventory, and household budget strain from broader inflation continue to weigh on first-time buyers in particular.
Freddie Mac's weekly survey, which has tracked mortgage rates since 1971, remains a closely watched indicator for both the housing industry and investors, as mortgage trends often reflect the broader trajectory of the U.S. economy and monetary policy.
