Buyers Rush for Loans as Mortgage Rates Fall

Mortgage rates saw their biggest drop in a year last week, setting off a wave of activity in the housing market. Loan applications jumped to their highest level in more than four years as buyers moved quickly to secure lower borrowing costs.

Applications for home purchases climbed 7% compared with the previous week and were 23% higher than the same time last year, according to the Mortgage Bankers Association. Refinancing also gained ground as more homeowners looked to take advantage of the rate decline.

The drop followed a dip in Treasury yields, which often influence mortgage rates, as concerns about a slowing labor market grew. While rates are still higher than they were a year ago, they have eased from earlier peaks this year, offering some relief to buyers. Many have turned to adjustable-rate mortgages, which typically start with lower payments than standard fixed-rate loans.

The Federal Reserve is scheduled to meet on September 17 and is expected to reduce its short-term benchmark rate. Though the Fed’s decisions do not directly set mortgage rates, they can shape overall lending conditions. A weakening job market may also prompt several rounds of rate cuts in the months ahead, which could further pull mortgage rates down.

Economists say lower rates could help unlock more demand after a slow summer, when elevated borrowing costs kept many buyers out of the market. A larger pool of qualified buyers could provide a boost to home sales moving into the fall.

Current Averages (week ending Sept. 11, 2025):

• 30-year fixed-rate mortgage: 6.35% (down from 6.50% the week prior; 6.20% one year ago)

• 15-year fixed-rate mortgage: 5.50% (down from 5.60% the week prior; 5.27% one year ago)