Will Interest Rates Go Down in September? | Predictions 2025

Mortgage rate forecast for next week (Sep. 8-12)

Mortgage rates fell for the second week in a row and now sit at 11-month lows.

The average 30-year fixed rate mortgage (FRM) decreased to 6.5% on Sep. 4 from 6.56% on Aug. 28, according to Freddie Mac. That marks 33 consecutive weeks below 7% for the average 30-year FRM.

“Mortgage rates continue to trend down, increasing optimism for new buyers and current owners alike,” said Sam Khater, chief economist at Freddie Mac. “As rates continue to drop, the number of homeowners who have the opportunity to refinance is expanding. In fact, the share of market mortgage applications that were for a refinance reached nearly 47%, the highest since October.”

Though lagging, the most recent weekly mortgage application report from the Mortgage Bankers Association showed a seasonally adjusted 1.2% decrease for the seven days ending Aug. 29. The refinance index rose 1% and the purchase index dipped 3% week-over-week.

“Purchase activity has been mostly higher in recent weeks, but dropped modestly last week as affordability challenges continue to pose a hurdle for some prospective buyers,” said Bob Broeksmit, president and CEO at the MBA.

In this article (Skip to...)

• Will rates go down in September?
• 90-day forecast
• Expert rate predictions
• Mortgage rate trends
• Rates by loan type
• Mortgage strategies for September
• Mortgage rates FAQ

Will mortgage rates go down in September?

“I’m cautiously optimistic that mortgage rates will inch lower in September as the Fed leans toward rate cuts, but I’m not anticipating a home-run drop.”

-Tony Julianelle, CEO at Atlas Real Estate

Mortgage rates fluctuated significantly in 2023, with the average 30-year fixed rate going as low as 6.09% and as high as 7.79%, according to Freddie Mac. That range narrowed in 2024, spreading from 6.08% to 7.22%.

With the economy probably heading into a recession, we may have already seen the peak of this rate cycle. But if inflation rises, mortgage rates could uptrend. Of course, interest rates are driven by many factors and notoriously volatile, so they could change direction any given week.

Experts from Realtor.com, First American, and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in September.

Expert mortgage rate predictions for September

Hector Amendola, president at Panorama Mortgage

Prediction: Rates will decrease

“Looking at the current economic conditions, including this summer’s sluggish labor market and the increasing strain in rate-sensitive sectors as inflation rises, it’s becoming increasingly difficult to see how the Fed can maintain rates at this level much longer. Based on Fed Chair Powell’s recent speech at Jackson Hole, it’s clear that the economic data indicate a need for some easing, which is expected to be announced in mid-September. To be clear, even though that announcement is weeks away, the mortgage market is already pricing in a pivot with an expectation of a 25-basis-point rate cut.”

Andrea Blais, SVP of real estate lending at SchoolsFirst Federal Credit Union

Prediction: Rates will moderate

“Mortgage rates have been holding steady for several weeks, and we expect much of the same in the foreseeable future. However, home inventories are increasing and home prices are stabilizing, which is having a positive impact on home sales.”

Jay Crowell, national retail division president at Cornerstone Capital Bank

Prediction: Rates will moderate

“We see rates staying within a similar range heading into September. The markets have already priced in a Fed funds cut, but the bigger question is how long-term bonds will respond, given current inflation concerns and tariff uncertainty. If the Fed holds steady, the markets may react poorly. But even with a cut, long-term yields could rise. It happened last fall when the Fed cut 50 basis points and rates actually spiked, so I don’t expect meaningful relief in mortgage rates anytime soon.”

Ralph DiBugnara, president at Home Qualified

Prediction: Rates will moderate

“Word on the street is that we may be looking at a first rate cut in a while at the September Fed meeting. The significance of a change in strategy to start cutting rates, may signal positive news for interest rates in the future. But I do not believe one rate cut will be enough to lower mortgage rates significantly. It’s going to take an overall change in policy to cut rates one to three times before we see it be a major factor to lower mortgage rates.”

Charles Goodwin, VP of bridge and DSCR lending at Kiavi

Prediction: Rates will moderate

“A majority of market participants and several analysts believe the Fed will cut interest rates by 25 basis points (0.25%) at the September meeting. This expectation has been fueled by recent economic data that suggests a cooling labor market, including a slowdown in job creation and downward revisions to previous payroll reports. Some analysts even believe there is a possibility for a larger cut.

Keep in mind that a strong opposing view exists, arguing that the Fed should not cut rates, based on inflation data that remains above the Fed’s 2% target. The Fed has a tough task ahead, as a weaker labor market, but also higher inflation, has emerged. If you ask me, they will prioritize labor markets over inflation.

There is also heavy political pressure from President Trump to cut rates. He has been very vocal about this. The Fed chair has publicly been very vocal that the Fed will remain independent. Finally, it’s important to remember that the Fed does not control mortgage rates. Mortgage rates are most closely tied to the 10-year Treasury yield. Even in the event of a Fed rate cut, I would not expect mortgage rates to come down. Bond investors are concerned about longer-term inflation and excessive government spending.”

Danielle Hale, chief economist at Realtor.com

Prediction: Rates will decrease

“The Fed is widely expected to make another cut to its policy rate in September, an expectation reinforced by Fed Chair Powell’s Jackson Hole address. As the labor market softens and inflation signals are difficult to parse amid new tariffs, the Fed is likely to cut rates as a way of easing its foot off of the proverbial economic brake, trying to find a more neutral position. In anticipation, longer-term interest rates including mortgage rates have trended lower. Home shoppers and sellers in September are likely to benefit from this shift in policy. There is a chance that a significant and surprising departure from recent inflation and employment trends could derail this outcome, but that’s not my expectation. If a surprise occurred, I would expect higher inflation or a stronger labor market would tend to push mortgage rates higher, whereas lower inflation or a weaker labor market reading would tend to nudge mortgage rates lower.”

Tony Julianelle, CEO at Atlas Real Estate

Prediction: Rates will decrease

“I’m cautiously optimistic that mortgage rates will inch lower in September as the Fed leans toward rate cuts, but I’m not anticipating a home-run drop. Bond yields and fresh jobs data will be smarter barometer as they ‘re more closely correlated to long-term rates. If the labor market softens in the early September report, long-term yields may soften further, but if markets sniff resilience, that relief could stall. It’s a fine-balance moment for sure: small relief, but nothing to bank on.”

Sam Williamson, senior economist at First American

Prediction: Rates will moderate

“Mortgage rates are expected to remain in the mid-to-upper 6% range in September after the recent downward drift, driven by increased market expectations for a series of Federal Reserve rate cuts beginning in September. Market expectations strengthened since the Fed’s meeting in late July because of indications the labor market is weaker than previously believed given the significant downward revisions to May and June payrolls and softer July hiring, supporting a more dovish Fed stance at its September meeting.

The shift in market expectations has dragged yields on 10-year Treasuries down, which mortgage rates loosely track. However, almost all Fed officials favored holding rates steady in July amid concerns about tariff-driven inflation, even as two governors backed a cut. As a result, any rebound in hiring or meaningful signs of increasing tariff-driven price pressures could complicate the case for easing, limiting how far mortgage rates fall in September, even as markets anticipate multiple cuts by year-end.”

Mortgage interest rates forecast next 90 days

As inflation ran rampant in 2022, the Federal Reserve took action to bring it down and that led to the average 30-year fixed-rate mortgage spiking in 2023.

With inflation gradually cooling, the Fed made three rate cuts in 2024 (September, November, and December). Heading into 2025, many experts believed mortgage interest rates would gradually descend.

Of course, rates could rise on any given week or if another global event causes widespread uncertainty in the economy.

Mortgage rate predictions for 2025

The 30-year fixed-rate mortgage averaged 6.5% as of Sep. 4, according to Freddie Mac. All five major housing authorities we looked at predict 2025’s third quarter average to finish above that.

Wells Fargo sits at the low end of the group, projecting the average 30-year fixed interest rate to settle at 6.65% for Q3. Meanwhile, the National Association of Home Builders had the highest forecast of 6.74%.

Current mortgage interest rate trends

Mortgage rates declined week-over-week.

The average 30-year fixed rate decreased to 6.5% on Sep. 4 from 6.56% on Aug. 28. The average 15-year fixed mortgage rate similarly fell to 5.6% from 5.69%.

Source: Freddie Mac

After hitting record-low territory in 2020 and 2021, mortgage rates climbed to a 23-year high in 2023 before descending somewhat in 2024. Many experts and industry authorities believe they will follow a downward trajectory into 2025. Whatever happens, interest rates are still below historical averages.

Dating back to April 1971, the fixed 30-year interest rate averaged around 7.8%, according to Freddie Mac. So if you haven’t locked a rate yet, don’t lose too much sleep over it. You can still get a good deal, historically speaking — especially if you’re a borrower with strong credit.

Just make sure you shop around to find the best lender and lowest rate for your unique situation.

Mortgage rate trends by loan type

Many mortgage shoppers don’t realize there are different types of rates in today’s mortgage market. But this knowledge can help home buyers and refinancing households find the best value for their situation.

Which mortgage loan is best?

The best mortgage for you depends on your financial situation and your goals.

For instance, if you want to buy a high-priced home and you have great credit, a jumbo loan is your best bet. Jumbo mortgages allow loan amounts above conforming loan limits, which max out at $ in most parts of the U.S.

On the other hand, if you’re a veteran or service member, a VA loan is almost always the right choice. VA loans are backed by the U.S. Department of Veterans Affairs. They provide ultra-low rates and never charge private mortgage insurance (PMI). But you need an eligible service history to qualify.

Conforming loans and FHA loans (those backed by the Federal Housing Administration) are great low-down-payment options.

Conforming loans allow as little as 3% down with FICO scores starting at 620. FHA loans are even more lenient about credit; home buyers can often qualify with a score of 580 or higher, and a less-than-perfect credit history might not disqualify you.

Finally, consider a USDA loan if you want to buy or refinance real estate in a rural area. USDA loans have below-market rates — similar to VA — and reduced mortgage insurance costs. The catch? You need to live in a ‘rural’ area and have moderate or low income to be USDA-eligible.

Mortgage rate strategies for September 2025

Mortgage rates displayed their famous volatility throughout 2024. Fed cuts in September, November, and December, with the potential for more in 2025 provide optimism for descending rates.

Previously, the central bank held off on a rate hike at eight consecutive meetings, preferring to see if the economy would keep cooling organically. They finally deemed inflation’s downtrend as organic and made its first cuts since 2020.

However, the Trump Administration’s upward wealth consolidation and ongoing inflation battles forced the Fed to hold in January, March, May, June, and July. As always, the committee said it would adjust its policies as necessary — which could mean additional cuts or possibly none at all.

Here are just a few strategies to keep in mind if you’re mortgage shopping in the coming months.

Be ready to move quickly

Indecision can lead to failure or missed opportunities. That holds true in home buying as well.

Although the housing market is becoming more balanced than the recent past, it still favors sellers. Prospective borrowers should take the lessons learned from the last few years and apply them now even though conditions are less extreme.

“Taking too long to decide to make an offer can lead to paying more for the home at best and at worst to losing out on it entirely. Buyers should get pre-approved (not pre-qualified) for their mortgage, so that the seller has some certainty about the deal closing. And be ready to close quickly — a long escrow period will put you at a disadvantage.

“And it’s definitely not a bad idea to work with a real estate agent who has access to “coming soon” properties, which can give a buyer a little bit of a head start competing for the limited number of homes available,” said Rick Sharga.

If mortgage rates continue on a downward trajectory, more and more buyers will likely enter the market after being priced out on the sidelines. Being decisive (and prepared) should only play to your advantage.

Shopping around isn’t only for the holidays

Since interest rates can vary drastically from day to day and from lender to lender, failing to shop around likely leads to money lost.

Lenders charge different rates for different levels of credit scores. And while there are ways to negotiate a lower mortgage rate, the easiest is to get multiple quotes from multiple lenders and leverage them against each other.

“For potential home buyers, it’s important to get quotes from multiple lenders for a mortgage, as rates can vary dramatically, especially during such a volatile period,” said Odeta Kushi.

As the mortgage market slows due to lessened demand, lenders will be more eager for business. While missing out on the rock-bottom rates of 2020 and 2021 may sting, there’s always a way to use the market to your advantage.

How to shop for interest rates

Rate shopping doesn’t just mean looking at the lowest rates advertised online because those aren’t available to everyone. Typically, those are offered to borrowers with great credit who can put a down payment of 20% or more.

The rate lenders actually offer depends on:

• Your credit score and credit history
• Your personal finances
• Your down payment (if buying a home)
• Your home equity (if refinancing)
• Your loan-to-value ratio (LTV)
• Your debt-to-income ratio (DTI)

To figure out what rate a lender can offer you based on those factors, you have to fill out a loan application. Lenders will check your credit and verify your income and debts, then give you a ‘real’ rate quote based on your financial situation.

You should get three to five of these quotes at a minimum, then compare them to find the best offer. Look for the lowest rate, but also pay attention to your annual percentage rate (APR), estimated closing costs, and ‘discount points’ — extra fees charged upfront to lower your rate.

This might sound like a lot of work. But you can shop for mortgage rates in under a day if you put your mind to it. And shaving just a few basis points off your rate can save you thousands.

Mortgage interest rate FAQ

What are today’s mortgage rates?

Mortgage rates are rising, but borrowers can almost always find a better deal by shopping around. Connect with a mortgage lender to find out exactly what rate you qualify for.

¹Today's mortgage rates are based on a daily survey of select lending partners of The Mortgage Reports. Interest rates shown here assume a credit score of 740. See our full loan assumptions here.

Selected sources:

• https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
• http://www.freddiemac.com/research/datasets/refinance-stats/index.page