Bankrate.com

If you’ve been holding out for lower mortgage rates, they’re finally here. The average 30-year mortgage rate began falling from 7% in mid-July, and landed just under 6.5% as of late August.

However, mortgage rates might not fall as precipitously this month, even with the likelihood of a Federal Reserve rate cut. With inflation cooler, the Fed is primed to cut rates at its next meeting ending Sept. 18 — the first reduction since the pandemic. While the Fed doesn’t directly set mortgage prices, it does influence them, and they’ve been trending down.

“Mortgage rates will trend lower in September, but it will be an uneven journey,” says Greg McBride, Bankrate’s chief financial analyst.

“Economic data, such as a weak jobs report, would spur more movement in mortgage rates than any response to a long-expected Fed interest rate cut.”

“Mortgage rates will bump around over the next few weeks, and I expect rates to be between 6.2% and 6.4% at the end of the year,” says Lisa Sturtevant, chief economist at Bright MLS.

Mortgage rates have already started to pull back, with the 30-year loan averaging 6.48% as of Aug. 28, according to Bankrate’s weekly lender survey.

Still, rates might not come down as low as some homeowners hope. In fourth quarter 2024 outlooks, Fannie Mae analysts anticipate 30-year rates at 6.4%, while the Mortgage Bankers Association predicts 6.5%. The National Association of Realtors projects 6.7%.

The average interest rate on a 30-year fixed mortgage was 6.48% as of Aug. 28, according to Bankrate’s survey of lenders.

Higher mortgage rates have kept homeowners locked in to lower-cost loans. Meanwhile, the median home price surged to a record $422,600 in July, according to the National Association of Realtors.