Mortgage rates are projected to remain mostly unchanged in early September, with movements thereafter hinging on the Federal Reserve's Sept. 17 decision. A Fed rate cut would likely keep mortgage rates flat or push them slightly lower for the remainder of the month; a decision to hold rates would probably drive mortgage rates higher. The 30-year fixed averaged just under 6.7% in August, limiting affordability and causing many prospective buyers to sit out the spring and summer season. Existing-home transactions fell to 2.33 million in the first seven months of 2025 versus 3.06 million in 2019. Few homeowners qualify to refinance; only about 2.4% had refinanceable loans when the 30-year averaged 6.8%. The central bank sets interest rates to meet two goals, with the first objective being to keep inflation under control.
Mortgage rates are likely to remain mostly unchanged in the first half of September. After that, the direction of mortgage rates depends on what the Federal Reserve does at its two-day meeting ending Sept. 17. If the Fed cuts short-term interest rates at the meeting, then mortgage rates should stay about the same or drop a little bit over the rest of the month. Right now, forecasters expect a cut.
At the same time, few homeowners have an opportunity to refinance into a lower rate. One rule of thumb is that a refinance is worthwhile if you can reduce the interest rate by three-quarters of a percentage point or more. This guideline means that when rates stand at around 6.6%, as they were toward the end of August, it might make sense to refinance if your mortgage has a rate above 7.25%.
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