Freddie Mac Mortgage Rates—Sept. 4, 2025
What happened to mortgage rates this week
The Freddie Mac 30-year fixed mortgage rate fell 6 basis points to 6.5% this week, registering a new 11-month low. After a long weekend and a slow week for economic releases, the market is preparing for Friday’s employment data. Historically, a weaker or softer-than-expected jobs report fuels optimism for Federal Reserve rate cuts and can lower bond yields, thereby nudging mortgage rates downward. Conversely, a robust jobs report may reinforce inflation concerns and elevate Treasury yields, putting upward pressure on mortgage rates. This setup underscores the potential for increased mortgage rate volatility ahead.
Buying power has been sapped fairly broadly compared with 2019 as mortgage rates remain elevated. The median-income family nationwide saw a nearly $30,000 reduction in homebuying power this summer compared with 2019. This is one of several frustrations for participants in what’s been a cruel summer for the housing market.
What it means for the housing market
Despite a summer marked by continued gains in inventory, the U.S. housing market remains distinctly slow-moving, suffering from ongoing affordability challenges. This “cruel summer” has sidelined buyers due to still-elevated prices and mortgage rates, while sellers hang in limbo, reluctant to cut prices and often withdrawing listings from the market. As a result, the market remains in stasis, inventory improvements notwithstanding, persistent cost burdens and economic uncertainty continue to suppress demand throughout the homebuying season.
Adding to ongoing affordability challenges, recent research underscores growing insurance-related financial burdens and climate-related exposure across U.S. housing markets, with 26.1% of homes, about $12.7 trillion in value, at severe or extreme risk from flood, wind, or wildfire. Homeowners in high-risk areas often face substantially elevated premiums or uninsured gaps, which, when combined with high borrowing costs, could dampen demand or reshape buyer behavior.
