Experts warn mortgage rates may not follow Fed cuts
US mortgage rates hit their lowest point since October 2024, but analysts caution that homebuyers should not expect dramatic declines even as the Federal Reserve prepares for a potential rate cut in September.
According to Freddie Mac data reported by Yahoo Finance, the average 30-year fixed mortgage rate fell to 6.58% as of August 14. That is down five basis points from the prior week and 17 basis points over the past month, though still nine points higher than the same period a year ago. Fortune, citing data from Optimal Blue, placed the 30-year fixed conforming rate slightly higher at 6.571% as of August 18.
Fed policy already priced in
The Federal Reserve is widely expected to lower its benchmark federal funds rate at its Sept. 16-17 meeting, with the CME FedWatch tool putting the probability of a cut above 85%. But industry experts stress that mortgage rates often move independently of Fed decisions.
“When the Fed cuts interest rates, rates on debt tied to the prime rate, like home equity lines of credit and credit cards, typically drop soon after,” Yahoo Finance noted. “But the rates on standard 30-year fixed mortgages aren’t linked to prime, and often don’t react much.”
Instead, mortgage rates are more closely tied to the 10-year Treasury yield, which has risen to 4.29% from 3.90% a year earlier. Lenders add a “spread” to those yields to account for risk, resulting in today’s average mortgage rate of 6.58%.
Volatility ahead of September
Several data releases in the coming weeks—including hiring reports and inflation readings—could push rates higher or lower before the Fed meets. “A lot of times, the market prices in expectations,” Bogdan Toderut, a loan officer with Summit Funding in Georgia, told Yahoo Finance. “When you see the big changes, you see them when expectations weren’t met.”
Some lenders are already fielding calls from prospective buyers waiting to see if rates will fall further in September. “It’s my least favorite thing to hear,” said Taylor Sherman, a mortgage loan originator in Tucson, Arizona. “Yes, Fed policy determines rates, but it’s really about how the market views Fed policy.”
Affordability and housing supply
Even with rates easing slightly, affordability remains stretched. A buyer with $3,000 a month to spend on housing now has roughly $20,000 more purchasing power than in May, when rates topped 7%, according to Redfin. Still, home prices remain elevated. The Federal Reserve Bank of St. Louis reported that the median price for single-family homes reached $410,800 in the second quarter of 2025.
Industry professionals caution that trying to time the market could leave buyers missing opportunities. Arkansas-based loan officer Amber Moser recalled preparing dozens of refinancing quotes when rates dipped to 6.2% last September. None of those deals went through, and clients later lost out on potential monthly savings of $300 to $400.
“There’s no crystal ball, and we have no idea what’s going to happen,” Moser said. “The best bet is, don’t try to time the market.”
Long-term perspective
While current rates may feel high compared to the pandemic-era lows of under 3%, Fortune noted that they remain well below historical peaks. In the early 1980s, mortgage rates soared above 18%. Today’s 6% to 7% range, experts say, could be the “new normal” for the foreseeable future.
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