The recent downward trend is making mortgage payments more affordable

-
Mortgage rates dipped to 6.50%, the lowest in nearly a year.
-
Pending home sales rose 1.6% year over year, but affordability challenges persist.
-
Median monthly housing payments fell to $2,593, the lowest level since January.
Mortgage rates continued their downward path this week. Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averages6.50%.
Mortgage rates continue to trend down, increasing optimism for new buyers and current owners alike, said Sam Khater, Freddie Macs chief economist. 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.
Current rates
-
The 30-year FRM averaged 6.50% as of September 4, 2025, down from last week when it averaged 6.56%. A year ago at this time, the 30-year FRM averaged 6.35%.
-
The 15-year FRM averaged 5.60%, down from last week when it averaged 5.69%. A year ago at this time, the 15-year FRM averaged 5.47%.
As rates continue to fall, house payments become a little more affordable for home buyers. A new report from real estate brokerage Redfin shows the median housing payment is down to $2,593, the lowest its been in January.
Lower payments are beginning to spur more activity. Pending home sales rose 1.6% from a year earlier, continuing several weeks of steady growth.
However, the rebound is modest. Home-sale prices climbed 1.6% year over year during the four weeks ending August 31, keeping affordability pressures high. Despite the recent dip, monthly payments remain 5% higher than they were a year ago.
Mortgage rates havent come down significantly enough to bring back a flood of buyers, said Mariah OKeefe, a Redfin Premier agent in Seattle.
She noted that while well-priced single-family homes in desirable neighborhoods are selling quickly, condos, townhouses, and homes that arent move-in ready are lingering on the market. Sellers, however, are increasingly willing to negotiate as demand remains subdued.
The supply side of the market also plays a role in stabilizing prices. While total homes for sale are up 11.3% from last year, thats the smallest increase in 18 months. New listings rose just 1.1% year over year, as some homeowners are choosing to stay put rather than risk selling in a market where buyers remain cautious. With inventory declining from its summer peak, upward price pressure remains.
Posted: 2025-09-05 11:01:05