The average rate on a 30-year fixed-rate U.S. mortgage fell once more this week. This decline presents a ray of hope for aspiring homebuyers. Just a week ago, Freddie Mac announced on Thursday, September 4, 2025, that the average rate had fallen to 5.6%. That’s an 18 basis point drop from 5.69% just one week prior. This is a huge drop from the national average of 5.47% just one year ago.
The average rate on a 30-year mortgage hit a record low of 6.08% just last week. This drop represents a further step in a trend of lowering rates that has been ongoing since late July. In the meantime, the long term rate has fallen to 6.5%. This is down from 6.56% last week and illustrates a larger phenomenon occurring within the mortgage market.
Those numbers come from Freddie Mac, the nation’s second-largest mortgage buyer. For comparison, they pointed out that last year, the average rate hit 6.35% at this time last year. This chart really highlights just how good times are right now for homebuyers, with rates recently on a steady downward path.
Beyond the 30-year mortgage rates, borrowing costs tied to 15-year fixed-rate mortgages have dropped significantly. These loans have been incredibly popular for homeowners seeking to refinance their current home loans. The recent decline in rates might encourage even more homeowners to consider refinancing. The surge of activity may spark an increase in transactions across the residential housing market.
Market experts tell us that when lenders go to price a home loan, they look at the yield on 10-year Treasurys and use that as a starting point. The recent drop in Treasury yields is probably responsible for pulling mortgage rates lower too. This new policy is significantly increasing affordability for homebuyers.
Looking forward, much of the speculation is focused on the Federal Reserve’s next meeting of policymakers later this month. A lot of people are expecting the Fed to start cutting its benchmark short-term interest rate soon, which could impact mortgage rates even more. This is a continuation of a trend that we reported on in tracking last year. After the Fed’s first rate cut in more than four years, borrowing costs fell dramatically.
