“Housing market activity continues to hold up with purchase and refinance applications increasing by 18% and 42%, respectively, compared to the same time last year,” Freddie Mac said.
Mortgage rates had been on a steady downward slide in the final weeks of summer as financial market expectations of a Federal Reserve interest rate cut grew. That descent took the 30-year average to their lowest level since October 2024.
The central bank trimmed its benchmark rate by 25 basis points last week, although mortgage rates inched upwards after that decision as bond yields ticked higher.
While speculation is continuing about possible further Fed cuts throughout the remainder of this year and 2026, there’s little prospect of mortgage rates nosediving anytime soon.
Fannie Mae believes 30-year fixed mortgage rates will average 6.4% by the end of this year, falling to 5.9% by the end of 2026.