Average rate on a 30-year mortgage drops to lowest level since October

[Omaha Steve]

Source: AP

By ALEX VEIGA
Updated 11:16 AM CDT, August 14, 2025

MCLEAN, Va. (AP) — The average rate on a 30-year U.S. mortgage fell this week to its lowest level in nearly 10 months, giving prospective homebuyers a sorely needed boost in purchasing power that could help inject life into a stagnant housing market.

The long-term rate fell to 6.58% from 6.63% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.49%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell. The average rate dropped to 5.71% from 5.75% last week. A year ago, it was 5.66%, Freddie Mac said.

Elevated mortgage rates have helped keep the U.S. housing market in a sales slump since early 2022, when rates started to climb from the rock-bottom lows they reached during the pandemic. Home sales sank last year to their lowest level in nearly 30 years.

Read more: https://apnews.com/article/mortgage-rates-housing-interest-financing-home-3bba3f6f23c277b000493bdc6bb86f20

[Buddyzbuddy]

1. Contrary to popular opinion, rates are not the main reason why people aren't buying homes.

It's the overinflated prices which have been driven by investment companies buying up properties. This administration's strategy is to make the rates the reason for the slump in order to pressure the Fed to lower rates.

In the late 1970's mortgage rates were in double digits and people were still buying homes.
The investor groups today are buying up homes with cash so rates aren't directly affecting their purchases.

Which does have an impact on the insurance industryas a result. They aren't required to maintain homeowners insurance by a non-existent mortgage company. Because they have so much cash they can self insure. The burden of supporting the insurance industry falls to the dwindling numbers of owner occupants or the smaller investor that may have 2 or 3 properties.

That's not to say higher rates don't have any impact, they do but, the larger concern is the much higher prices of homes in the past few years.
If you purchase a home with a 30yr fixed rate then you know the rate won't go up but, there is a real possibility mortgage rates will be reduced during that 30 years which would allow you to refinance at a lower rate. If you pay the current inflated price for a home, you're stuck with that, in addition, if home values drop you're now upside down with no way out except a short sale or foreclosure if you can't make that payment for some reason.
Investment companies don't have that burden. They just rent the property and collect income on their investment. If rates fall, they can always mortgage the property to get a cheap cash infusion if desired at a low locked in rate.

[slightlv]

3. And so much of their policies lead to people being foreclosed on,

kicked out in the streets, and now threatened and rounded up like criminals. It's a self-perpetuating cycle where *someone* is getting a lot of kickback somewhere, IMO.

[Buddyzbuddy]

4. Absolutely correct.

[twodogsbarking]

2. Real Estate prices. Either we are riding a wave that will never stop or we will hit shore, like before.

[Wonder Why]

5. You should put that to music. Add a dog, a pickup and an ex-wife who left you and you have a Country top 10 hit.