Falling mortgage rates reach nine-month low
Mortgage Rates Remain Stable Amid Economic Fluctuations
Mortgage rates have remained within a narrow range for the past nine months, providing some stability in the housing market. This week, the national median family income for 2025, as reported by the U.S. Department of Housing and Urban Development, stands at $104,200, with the monthly payment for a typical family representing 26 percent of their monthly income.
The Federal Reserve did not make any changes to the federal funds rate at its most recent meeting, and the weekly national survey of large lenders conducted by ourwebsite.com shows a consistent market trend. Fixed mortgage rates are not set directly by the Fed but by investor appetite, particularly for 10-year Treasury bonds.
Week-to-week rate changes are generally modest, often measured in basis points (one one-hundredth of a percent). For instance, in August 2025, the 30-year fixed mortgage rate fluctuated in the 6.5% to 6.7% range, moving only a few basis points each week.
Key factors influencing these weekly shifts include inflation data, Federal Reserve policy expectations, investor demand for mortgage-backed securities, and economic growth and job market indicators. Slower-than-expected inflation growth can lower mortgage rates, while uncertainty or expectations of rate hikes can drive rates higher. Investor demand for mortgage-backed securities also plays a significant role, with strong demand increasing liquidity and pushing rates lower.
In August 2025, President Donald Trump's tariff policies have been blamed for an increase in inflation, which moved up to 2.7% in June and stayed at 2.7% for July. However, as of Wednesday afternoon, 10-year Treasury yields were below 4.3%, which can help keep mortgage rates relatively low.
When there's uncertainty in the market, investors often buy Treasury bonds, which can drive mortgage rates downward. Discount points are another way to lower your mortgage rate, while origination points are fees lenders charge to create, review, and process your loan.
As of this week, the current average 30-year fixed mortgage rate stands at 6.61%, with the average total discount and origination points for 30-year fixed mortgages being 0.33. The current average 15-year fixed mortgage rate is 5.80%, and some buyers are waiting for both rates and prices to come down before entering the market.
Chad Smith, president of mortgage lender Better, does not expect mortgage rates to drop below 6%. However, Lisa Sturtevant, chief economist at Bright MLS, notes that some buyers are waiting for a potential dip in both rates and prices before making their move.
[1] Source: Ourwebsite.com's weekly national survey of large lenders [2] Source: Mortgage News Daily [3] Source: Freddie Mac [4] Source: Bankrate.com
- For personal-finance planning, understanding the stability of mortgage rates amid economic fluctuations can be crucial, as the national median family income might require a specific percentage of their income for a typical mortgage payment.
- In the current market, managing personal-finance requires considering factors like investor appetite for 10-year Treasury bonds, Federal Reserve policy expectations, and economic growth indicators, which can influence mortgage rates. Lower inflation growth or investor demand for mortgage-backed securities may lead to lower mortgage rates, providing opportunities for financial savings.
