Homebuyers and owners looking to refinance are hoping for a mortgage rate drop this fall. Here’s what to expect.
The housing market over the past few years has been challenging for prospective homebuyers. As home prices and mortgage interest rates remain high, first-time homebuyers face a one-two punch, making it difficult to break into real estate and get a place of their own.
Average mortgage interest rates are 6.58% on a 30-year fixed-rate mortgage as of August 21, based on Freddie Mac data. While that rate was flat from the week before, overall, the summer brought some welcome news: a mortgage interest rate drop. At the start of summer, mortgage rates stood at 6.85%, marginally higher than where they are now. But where are mortgage rates headed for fall?
The Federal Reserve is meeting again in September to discuss the future of the federal funds rate, to help manage inflation and employment, which could have an impact on mortgage rates. We spoke to several mortgage experts about the mortgage interest rate forecast for fall 2025 and what to expect.
See how low of a mortgage interest rate you could qualify for here.What’s the mortgage interest rate forecast for fall 2025?
Whether mortgage rates rise or drop depends on various factors. Here’s what might impact mortgage rates this fall and what experts forecast about where they’re headed:Understanding mortgage rates and the Federal Reserve
Due to persistent inflation, the Federal Reserve has maintained the federal funds rate at its current level throughout 2025. But the September meeting could finally see some movement and be a game-changer. Questions about what the Federal Reserve plans to do next have continued for months and answers seemed uncertain.
However, recently, the Federal Reserve Chair Jerome Powell hinted that there could be a rate cut in September, as the agency considers its strategy to balance employment and inflation.
