Blog > Mortgage Rates Drop to Fall 2024 Levels! What It Means for Homebuyers and Homeowners?
Mortgage Rates Drop to Fall 2024 Levels! What It Means for Homebuyers and Homeowners?
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Mortgage rates just took a surprising turn downward, bringing much-needed relief to homebuyers and homeowners. According to Mortgage News Daily, the average 30-year fixed mortgage rate dropped sharply on September 5, 2025, from 6.45% to 6.29% in just one day. This is one of the biggest one-day drops in recent memory and brings rates back to levels last seen in fall 2024.
What caused the drop? It all comes down to the latest jobs report, which showed weaker-than-expected hiring in August. Only 22,000 jobs were added, compared to the 75,000 many economists were expecting. This sign of a slowing economy triggered a rally in the bond market, causing mortgage-backed securities to gain in value and yields to fall. Since mortgage rates are closely tied to these yields, rates moved down quickly in response.
For borrowers, this is great news. If you're in the market for a home, lower rates mean lower monthly payments or the ability to afford a bit more house. For example, someone buying a $400,000 home with 10% down could now save around $133 per month compared to just a few weeks ago. Over the course of a year, that adds up to over $1,600 in savings. For current homeowners who locked in rates over 7%, this could also be a great time to consider refinancing.
However, not everyone is rushing to take advantage of the lower rates just yet. Home prices remain high in many areas, and affordability is still a concern. Many buyers are waiting to see if prices will cool off or if rates will drop even further. Still, mortgage applications, especially for refinancing, are starting to pick up. Analysts estimate that over 2 million homeowners could now benefit from refinancing, and if rates continue to decline toward 6%, that number could triple.
It's important to note that this rate drop might not last forever. While some experts believe we’ll see rates stay in the mid-6% range through the rest of 2025, it all depends on economic data and future decisions by the Federal Reserve. If inflation rises or the job market strengthens, rates could head back up. On the other hand, continued economic weakness could push them even lower.
For now, though, this is a window of opportunity. Whether you’re thinking about buying a home or refinancing an existing mortgage, today’s rates are the lowest we've seen in nearly a year. It may be a smart time to act, or at least start running the numbers.
For more information about the recent drop, check out the article below.