Mortgage Rate Predictions for September: When Will Mortgage Rates Go Down in 2025?
The current mortgage interest rates forecast is for rates to remain elevated compared to where they stood pre-pandemic, but drift downward over the rest of the year. The Federal Reserve has signaled the possibility it will make a cut soon, which could help nudge mortgage rates downward as we progress through the year.
Market watchers are still monitoring President Trump’s tariffs for signs they could fuel inflation and drive up mortgage rates. That said, September is likely to give us incremental downward movement rather than dramatic movement in either direction.
In the long term, high rates and low affordability will likely keep the housing market sluggish for the remainder of this year.
Mortgage rates forecast for September 2025: When are rates expected to drop?
Mortgage interest rates are expected to remain above 6.5% in September — more than double the 2021 lows of around 2.65% — but decline modestly to around 6.5% by the end of the year.
National average rates ended August at 6.56%, and experts anticipate further modest declines in the coming months. Fannie Mae, for example, expects rates to move lower and ultimately close the year at approximately 6.5%.
Even if mortgage rates do fall below 6.5% at some point in 2025, they aren’t expected to dip much lower than that — and rates could also go the other direction if the economy weakens, inflation rises or bond investors pull back due to economic uncertainty.
It’s almost certain that rates will remain high compared to the levels seen during the height of the COVID-19 pandemic, when average 30-year mortgage rates were around 2.65%. Those record lows, as nice as they were, might not ever be seen again in our lifetimes.
If mortgage rates fall significantly in the wake of a future Fed rate cut, housing demand could spike, leading to home prices climbing quickly. The best thing potential homebuyers can do is to prepare as if costs will remain elevated. If conditions improve, they’ll be in an even better position. If they don’t, they’ll still be able to manage.
Will home affordability improve in September?
Potential homebuyers shouldn’t expect radically better affordability in September than they saw during most of the last few months. However, we could see some moderate improvements. Here’s why:
An expected Fed rate cut
The good news: The Fed appears increasingly likely to cut rates at its September meeting, which could help mortgage rates move downward. Fed Chairman Jerome Powell hinted in August that the Fed may cut interest rates soon, saying that shifting economic factors “may warrant adjusting our policy stance.”
The bad news: The markets may have already priced in some amount of the Fed’s expected cut, so interest rates are unlikely to fall the full amount of a given cut. Additionally, an interest rate cut doesn’t directly or immediately translate into falling mortgage rates.
A Federal Reserve rate cut directly affects adjustable-rate mortgages, since their interest rates are calculated using a number — known as an index — that fluctuates with the broader economy. The Fed’s cuts are to the federal funds rate, which is a benchmark index.
The Fed’s rate cuts indirectly impact fixed-rate mortgages, which can move more independently and, in some cases, can even move in the opposite direction of the federal funds rate. That said, when the federal funds rate drops, mortgage rates tend to follow. They can also drop in anticipation of a federal funds rate cut, as they did just before the Fed’s September 2024 rate cut.
Home prices are moderate in September
Historically, September is only a moderately expensive month in which to buy a house. Unsurprisingly, none of the best days of the year to purchase — the days on which you pay one of the lowest premiums — appear in September, according to an analysis by real estate data company ATTOM.
Notably, the potential for some small price breaks is on the horizon. If the amount of available housing — also known as housing “inventory” — rises significantly, that could help with affordability. Inventory has grown in recent months, and in August rose 16% YoY.
Additionally, some select parts of the nation are starting to see lower home prices. “They aren’t plunging,” observes Matt Schulz, LendingTree’s chief consumer finance analyst, “but in places like Florida and Texas in particular, home prices were on a rocket ride for so long — but now [they’ve] begun to fall.”
Home affordability remains low
Unfortunately, the housing market continues to be prohibitively expensive for many Americans. More than 7 in 10 (75%) metro areas in the U.S. saw the median existing home price rise in the second quarter of 2025. In fact, median home prices have risen by roughly 12% over the last four years, landing at $410,800 in Q2 2025. To put that in perspective, the national median monthly mortgage payment homebuyers applied for was a hefty $2,127 as of July 2025.
Takeaway: We’re likely to see at least a small rate dip in September, but it won’t be enough to change the overall picture for most. Fueled by high home prices, low inventory and steep mortgage rates, home affordability remains low today and home sales are the slowest they’ve been in several decades.
The housing shortage stems from several interconnected factors:
- Mortgage rate lock-in effect. More than 80% of homeowners have mortgage rates below 6% As of the fourth quarter of 2024, according to data from the Federal Housing Finance Agency , making them reluctant to sell and take on higher rates.
- Slow home sales. Existing home sales are near their slowest pace in nine months, but are picking up slowly. Purchase volume was 17% higher than this same time last year, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending Aug. 29, 2025.
- New market dynamics. For the first time since 1989, buying an existing home costs more than buying a newly constructed home, according to the National Association of Home Builders.
Explore whether it’s better to rent or buy in today’s market.
Current mortgage rates for September 2025
30-year
Mortgage rates are averaging:
6.60%
Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners over the past seven days for each combination of loan program, loan term and loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.15-year
Mortgage rates are averaging:
5.65%
Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners over the past seven days for each combination of loan program, loan term and loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.Current refinance rates for September 2025
30-year
Mortgage refinance rates are averaging:
6.88%
Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners over the past seven days for each combination of loan program, loan term and loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.15-year
Mortgage refinance rates are averaging:
6.20%
Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners over the past seven days for each combination of loan program, loan term and loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.Refinancing in 2025: What you need to know
Refinancing doesn’t make sense for most homeowners sitting on the low rates they locked in before 2022. That’s when the market began its march upward — moving ever further from the sanguine rates of 2021 which, even at their highest point, barely exceeded 3%.
However, refinance application volume has grown slowly over the course of 2025, and has already picked up significantly since we’ve entered peak homebuying season. In fact, this year’s spring refinance volume overtook last year’s by 45%, according to the MBA’s data. And so far summer sales are heading in a similar direction, overtaking last year’s by 23%.
Who does refinancing make sense for right now?
A refinance might make sense for some borrowers as long as they know exactly what benefit they’ll get out of it. For example, if you’re refinancing an adjustable-rate mortgage (ARM) to a fixed-rate loan, tapping your equity with a cash-out refinance or getting a new interest rate that will lower your payments.
It’s typically smart to hold off on a refinance until you could get a rate that’s at least 50 basis points Basis points are units used to measure changes in interest rates. One hundred basis points are equal to 1 percentage point, so 50 basis points are equal to 0.50%. lower than the one you already have — and ideally 75 to 100 basis points lower.
“It may make sense to wait until 2026 to refinance, given that rates are expected to fall later this year,” Schulz says, “but the truth is that there’s no one-size-fits-all answer for when it is best to refinance.”
Weigh how the savings you could achieve in the current market will affect you — if they’ll pull you back from the edge of financial desperation, it makes sense to act quickly. If you’d just like to save a little money, it could make sense to wait since rates are expected to dip closer to 6.1% by the end of 2026.
The big picture: What’s driving today’s mortgage rates?
Although pandemic-related inflation took longer to cool than expected, it is cooling. In fact, after reaching a high point in 2022, it slowed down steadily all the way through the spring of 2025. This suggests that the most acute pandemic-driven price pressures have largely worked through the system.
However, we’re now dealing with policy-driven inflationary pressures rather than purely pandemic-related ones. With President Trump’s tariffs continuing to percolate through the U.S. economy, inflation is still running above the Fed’s target. This makes the Fed pretty unlikely to make cuts. So, for now, getting into the market means making peace with a rate between 6.5% and 7%.
Takeaway: Homebuyers should focus on what they can afford in the current market rather than obsessing over the future. “Shop around for rates,” Schulz urges. “Yes, rates are going to be high everywhere, but they can still vary significantly among lenders. Those differences can be a big deal because even a fraction of a point difference on an interest rate can save you hundreds or even thousands of dollars over the life of the mortgage.”
So far, mortgage interest rates have dropped slightly since President Trump’s tariffs went into effect. However, many economists believe that the tariffs have already begun to create inflationary pressure, which could eventually push up mortgage interest rates.
Potential homebuyers should prepare themselves for the distinct possibility that tariffs will cause housing prices to rise, perhaps significantly.
How to get the best mortgage rates
1. Boost your credit score
Pay your bills on time, minimize your credit card balances and avoid opening several new credit accounts at once. You’ll get the best conventional mortgage rates with a 780 credit score or higher.
Learn more about ways to boost your credit score.
2. Compare rates from multiple lenders
LendingTree data consistently show that consumers who shop around for mortgage rates typically save money. Get a loan estimate from three to five different mortgage lenders and compare the rates and terms you’re offered.
Learn more about our picks for the best mortgage lenders.
3. Consider paying points
A mortgage point costs 1% of your loan amount, and paying for points allows you to “buy” a cheaper interest rate. Read the fine print if you see an online rate that looks lower than what other lenders are offering — there’s a good chance you’ll pay points to get it.
Ready to see competitive rate offers on LendingTree?
Frequently asked questions
If you can afford a mortgage and find a home that suits your needs, now can be a good time to buy, despite high rates and a limited number of homes for sale.
Timing the market is extremely difficult, if not outright impossible. So if you’re waiting to make a choice based on what you hope will happen instead of what’s already going on, you could end up missing out on a lot of good opportunities — even in today’s expensive housing market.
Although President Trump has promised to lower interest rates, the reality is that a president can’t unilaterally change interest rates. Interest rates are determined by several factors, including the financial markets and the Federal Reserve — not executive orders or presidential decisions.
Mortgage rates are even more complex, and respond to additional factors like the cost of building materials, employment rates and housing inventory.
“There’s no reason to think that the housing market is going to crash anytime soon,” Schulz says. Low unemployment and foreclosure rates, as well as a moderate housing inventory increase are all signs that the housing market is relatively healthy, he adds.
And, if you’re thinking a housing market crash could even bring some benefits — like lower home prices — he offers this reminder: “These things don’t happen in a vacuum. A housing market crash very well might be accompanied by a recession, for example. That would likely mean increased unemployment and greater overall economic uncertainty, leaving people even less able to afford to buy.”
A mortgage interest rate is the base rate you’re charged to borrow money, but a mortgage annual percentage rate (APR) is the total cost of taking out a mortgage (the interest rate plus closing costs and fees). Both numbers are expressed as a percentage. For more details, check out our guide to distinguishing an APR versus interest rate.
The Federal Reserve’s monetary policy indirectly impacts fixed-rate mortgages, which are often tied to the 10-year U.S. Treasury bond yield. The Fed’s policies have a direct effect on loans with variable interest rates, including ARMs, credit cards and home equity lines of credit (HELOCs).
Haggle for a lower interest rate by using your mortgage offers as leverage. Ask each lender about matching your lowest quoted rate. Consider making a larger down payment, select an ARM loan with a lower initial rate or ask your lender about your mortgage buydown options.
Discuss mortgage rate lock options with your loan officer once you’re under contract on a home and moving through the application process. Rate locks usually last between 30 and 60 days, but they can be longer. Watch your expiration date — you may face a rate lock extension fee if your loan doesn’t close before your rate lock expires.
Mortgage rates dropped to a historical low of 2.65% in January 2021, when the Federal Reserve cut the federal funds rate to 0% to stabilize the post-pandemic economy.
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