S
eptember 7, 2025 – Mortgage rates have slipped again, with the average 30‑year fixed rate falling to 6.40 % (‑19 bps from last week) and the 30‑year refinance rate dropping to 6.60 % (‑24 bps). Freddie Mac reports that nearly 47 % of mortgage applications are for refinancing, the highest share since October, signalling a surge in affordability and buyer confidence.
**Key Highlights**
- 30‑year fixed rate: 6.40 % (‑19 bps)
- 30‑year refinance rate: 6.60 % (‑24 bps)
- Refinance applications: 47 % of total, record high
- Labor market softness and cooling inflation are nudging expectations of a Fed rate cut, which could further lower rates
- Nationwide loan‑type activity is rising as rates ease
- Analysts predict rates will stay above 6 % through 2025, easing toward 6.1 % in 2026
- Most loan programs (FHA, VA, ARM, Fixed) are trending lower, though FHA 30‑year rates edged up slightly
**Current Rate Snapshot (Zillow)**
| Loan Type | Current Rate | 1‑Week Change | APR | 1‑Week Change |
|-----------|--------------|---------------|-----|---------------|
| 30‑Year Fixed | 6.40 % | ‑0.18 % | 6.84 % | ‑0.19 % |
| 20‑Year Fixed | 5.90 % | ‑0.54 % | 6.34 % | ‑0.50 % |
| 15‑Year Fixed | 5.43 % | ‑0.22 % | 5.71 % | ‑0.23 % |
| 10‑Year Fixed | 5.79 % | 0.00 % | 6.09 % | 0.00 % |
| 7‑Year ARM | 6.83 % | ‑0.21 % | 7.70 % | 0.00 % |
| 5‑Year ARM | 6.68 % | ‑0.20 % | 7.51 % | ‑0.08 % |
**Government‑Backed Loans**
| Loan Type | Current Rate | 1‑Week Change | APR | 1‑Week Change |
|-----------|--------------|---------------|-----|---------------|
| 30‑Year FHA | 6.44 % | +0.42 % | 7.45 % | +0.42 % |
| 30‑Year VA | 5.85 % | ‑0.21 % | 6.07 % | ‑0.20 % |
| 15‑Year FHA | 5.13 % | ‑0.38 % | 6.09 % | ‑0.38 % |
| 15‑Year VA | 5.53 % | ‑0.17 % | 5.88 % | ‑0.14 % |
**Refinance Rates (Zillow)**
| Loan Type | Current Rate | 1‑Week Change |
|-----------|--------------|---------------|
| 30‑Year Fixed | 6.60 % | ‑0.07 % |
| 15‑Year Fixed | 5.38 % | ‑0.01 % |
| 5‑Year ARM | 7.05 % | ‑0.05 % |
*Example:* A $300,000 loan at 6.60 % saves roughly $50 a month versus 6.84 %, totaling about $6,000 in interest over 30 years.
**Economic Drivers**
- August 2025 jobs report: +22,000 jobs, unemployment 4.3 % – a cooling labor market.
- Core PCE inflation near 2.7 % – modest decline.
- Market anticipates a Fed cut of at least 0.25 % (some expect 0.5 %) at the September 16–17 meeting.
- 10‑year Treasury yields have fallen, pulling mortgage rates down.
- A split Fed board vote on July 30 hinted at a policy shift.
These conditions reverse the 2021‑23 trend of high rates driven by aggressive Fed hikes, creating a window for lower borrowing costs.
**Forecasts**
| Source | End‑2025 | 2026 |
|--------|----------|------|
| NAR | 6.4 % | 6.1 % |
| Fannie Mae | 6.5 % | 6.1 % |
| Realtor.com | 6.4 % | – |
| Mortgage Bankers Association | 6.7 % | 6.5 % |
Rates are expected to stay above 6 % through 2025, easing toward 6.1 % in 2026, contingent on economic data and Fed moves.
**Impact on Buyers and Homeowners**
- Lower rates open the market for buyers who were priced out earlier in the year.
- Homeowners can refinance to reduce payments or shorten terms; the high refinance share reflects widespread uptake.
- Investors monitor these shifts to gauge demand, pricing, and overall market momentum.
**Why the Current Environment Matters**
The confluence of weaker job growth, easing inflation, and an anticipated Fed cut creates a rare period where borrowing and refinancing become more attractive. Adjustable‑rate mortgages remain volatile, so borrowers should weigh short‑term gains against potential future adjustments. Conventional rates continue to decline steadily, indicating reduced lender risk.
**Strategic Takeaway**
With rates still above 6 % in 2025, investors should focus on stable, income‑generating properties. Turnkey rental solutions in resilient markets can build cash flow and hedge against borrowing cost volatility.
For more personalized guidance, contact a Norada investment counselor at (800) 611‑3060.
