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Key Takeaways
- 30-year mortgage rates have fallen to their lowest level since March, and real-time data suggests they’re drifting even lower today.
- The Fed is expected to deliver multiple rate cuts this year, with forecasts strengthening after the weak August jobs report.
- But mortgage rates don’t always move in sync with Fed policy, since long-term borrowing costs are driven more by bond yields and broader economic forces.
- For buyers and refinancers, timing the mortgage rates market is difficult—what matters most is financial readiness, with the option to refinance later if rates drop.
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Mortgage Rates Are at Their Lowest Since March
Since mid-July, 30-year new purchase mortgage rates have been drifting lower. A fresh two-day slide has now pushed the flagship average to its cheapest level in six months—and real-time data suggests the average could dip even further by day’s end.
On Thursday, the national average fell 5 basis points to 6.59%—its lowest since the 6.58% reading on March 5. As of mid-day Friday, the average had dropped another 8 basis points to 6.50%, matching 2025’s low set on March 4.
The Fed Is on Track for Multiple Rate Cuts This Year
After three rate cuts last fall, the Federal Reserve has so far held its benchmark rate steady throughout 2025. That stance will almost certainly change soon, especially after today’s dismal jobs report.
As of yesterday, markets were pricing in a near-certain quarter-point cut at the central bank’s Sept. 17 meeting. But weaker-than-expected job numbers this morning shifted expectations: there’s now an 8% chance of a bigger half-point cut, and majority odds point to reductions totaling at least 0.75 percentage points by year-end—up from just a likely half-point cut projected yesterday.
The Fed’s September decision won’t be known for another 12 days, and its October and December moves remain even less certain. Still, Fed cuts won’t guarantee mortgage rates will follow.
Why Even Big Fed Cuts Don’t Promise Lower Mortgage Rates
It’s a common assumption: when the Fed cuts rates, mortgage rates fall. But that’s not how it works.
The federal funds rate mainly affects short-term borrowing costs—think credit cards, personal loans, and bank deposit rates—not long-term loans like mortgages.
Fixed-rate mortgages are driven by broader forces, including inflation, consumer demand, housing supply, and overall economic strength. Most importantly, they tend to track the bond market, especially 10-year Treasury yields. This morning, those yields sank to a five-month low after the weak August jobs report.
This complex mix of factors is why mortgage rates often move independently of the Fed—and sometimes in the opposite direction. Case in point: in late 2024, the Fed cut rates by a full percentage point over three months. Yet, instead of falling, 30-year mortgage rates surged nearly 1.25 points higher by mid-January.
What This Week’s Drop Means for Buyers and Refinancers
Deciding when to buy a home—or refinance a higher-rate mortgage—is never simple. Should you take the plunge now, wait until later this year, or hold out for 2026 in hopes of cheaper borrowing?
The challenge is that mortgage rates are notoriously unpredictable. Industry forecasts currently see the 30-year average drifting only into the mid-6% range by year-end and perhaps the low-6% range in 2026. But today’s weak jobs report and the prospect of larger, faster Fed cuts could prompt those predictions to change.
Still, there’s a strong case for buying when you’re financially ready and have found the right home. Waiting on the chance of lower rates could mean missing out, and even if you lock in a mortgage now, you’re not stuck with it forever. Should rates fall in the future, refinancing remains an option for reducing your costs.
Today’s Mortgage Rate News
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The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.
