Brokers aren’t expecting borrowing costs to plummet, but rate stability would be a welcome development
US mortgage rates may not exactly be nosediving, but another decline last week took the 30-year fixed average to its lowest level since April in a welcome – if mild – boost for homebuyers.
That average now sits at 6.63%, Freddie Mac said, compared with 6.72% the week before. It’s still slightly higher than the same time last year, and well above its September 2024 low of 6.09%, but steady drops over the past few weeks suggest a slightly improving affordability picture for buyers.
Fannie Mae, which releases regular projections on the future of US mortgage rates, currently expects the 30-year average to end the year at 6.4%, followed by a drop to 6.0% by the end of 2026.
Mortgage brokers and loan originators are tempering positivity about lower rates with the hard reality that they’re unlikely to slide below 6% anytime soon.
“It’s mixed feelings,” Mackenzie Barrett (pictured top), chief sales officer at Safetrust Mortgage, told Mortgage Professional America. “I do think that we’ll end the year at a lower interest rate than where we started. We’re definitely going to have access to lower interest rates by the end of Q4, and I think we’re going to see this trend of rates decreasing. But it’s within pocket.
“So we’re only going to have moments of these dips, and then it’ll creep up. But with economic growth and the anticipation of people’s finances hopefully rebounding, I think the rates will kind of check themselves going into next year – though I don’t think that we’re quite yet going to see 5% interest rates.”
Rate stability a welcome sign for brokers and borrowers
Average mortgage rates have experienced something of a wild ride in recent years. The chaos of the COVID-19 pandemic in the US saw the 30-year slide as low as 2.67% in December 2020, before a rapid 2022 spike spurred in part by Federal Reserve interest rate hikes and an alarming inflation uptick.
On January 13, 2022, that average rate sat at 3.45%. By November 3 of that year, it had jumped to 6.95%, and shot as high as 7.76% 12 months later.
But the market has since been spared those huge runups, with rates largely hovering in the 6-7% range throughout 2024 and most of 2025. That means while scores of homebuyers flocked to the sidelines as rates began to spiral upwards after 2022, clients are no longer as alarmed by developments on the interest rate front.
Barrett said a calm spell for rates, with few big fluctuations, would spell further welcome news for buyers. “That’s the part that always catches us in this industry – the consistency,” he said. “Things will be headed in one direction one day and then the next quarter they’ve done a 180, and then rather back in another 180 the next three months.
“So if we can find that consistency, then our expectations should be between that 6.25% and 6.5% stabilized by the end of the year.”
Kristi Hardy of Atlantic Coast Mortgage says inventory is up significantly, and homes are now selling closer to list price and staying on the market longer.https://t.co/XTySdWaDkd
— Mortgage Professional America Magazine (@MPAMagazineUS) August 6, 2025
Room for optimism in both purchase and refi markets
The good news for mortgage professionals is that mortgage applications have also been on the up, rising by 3.1% last week compared with seven days prior, according to Mortgage Bankers Association (MBA) data.
Refinance activity was a significant driver of that trend. The MBA’s Refinance Index was up 5% from the previous week and 18% higher than the same time last year as borrowers moved to take advantage of the recent drop in rates.
For Barrett, those developments suggest there’s reason for cautious optimism between now and the end of the year, not least because a quieter market has shifted in favor of buyers.
“I’m pretty confident,” he said. “It’s a buyer’s market, and a lot of the markets that I operate in and coach in and assist the rest of my team in, we’re seeing buyers get away with a lot in terms of having closing costs covered, as far as having temporary rate buydowns.
“Those make their initial years in that home the most affordable. And again, with the rates helping, it’s just making a pretty good combination. I think we’ll be able to finish the purchase season with an increase in application volume – and we’ll see an uptick in refinance applications as well.”
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