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Today’s Mortgage Rates: August 28, 2025 – A Notable Decrease

As of August 28, 2025, mortgage rates are witnessing a modest yet significant decline across various loan types. The average 30-year fixed mortgage rate fell to 6.52%, a drop from 6.67% the previous week. This shift indicates a gradual easing in borrowing costs, reflecting an environment of cautious optimism among buyers and refinancing homeowners. As discussions of a potential Federal Reserve rate cut gain momentum, it’s essential for homebuyers and those looking to refinance to stay informed about these changes.

Key Takeaways

• 30-Year Fixed Rates: Decreased to 6.52%, down 15 basis points from the previous week.
• 15-Year Fixed Rates: Also dropped to an average of 5.58%.
• 5-Year ARM Rates: Now at 6.77%, reflecting a favorable trend.
• Refinance Rates: The 30-year fixed refinance rate lowered to 6.83%.
• Future Outlook: Rates are expected to remain above 6% in the coming quarters, but a rate cut by the Fed in September could lead to further reductions.
• Fannie Mae Forecast: Anticipates rates dipping below 6% only by the third quarter of 2026.
• Economic Influencers: Inflation and employment statistics are crucial in shaping these mortgage rate trends.

Understanding Mortgage Rates – August 28, 2025

Mortgage rates are influenced by a complex interplay of economic factors, particularly inflation, Federal Reserve policies, and job market dynamics. Currently, the typical rate for a 30-year fixed mortgage stands at 6.52%, reflecting a significant change after several months of stable rates hovering around 6.6% to 6.8%.

This recent decline is largely attributed to lackluster job growth data, which has tempered inflation expectations. Although inflation remains slightly elevated, it has shown signs of cooling, hinting that the Federal Reserve may consider lowering its benchmark interest rates—a change many anticipate as soon as September.

Mortgage Rate Trends in 2025

Looking back, mortgage rates surged significantly following aggressive rate hikes by the Federal Reserve, which increased the federal funds rate by over 5 percentage points between March 2022 and July 2023 due to inflationary pressures. These hikes resulted in mortgage rates climbing to levels not seen in two decades. However, by late 2024, the Fed began reversing course, allowing rates to stabilize through 2025.

Current Mortgage Rates by Loan Type (August 28, 2025)

Source: Zillow Mortgage Rates, August 28, 2025

These figures illustrate a slight easing in fixed-rate loans, particularly notable in the 15-year and ARM categories, where the 7-year ARM saw a more significant reduction of 0.57%. Government-backed loans continue to provide competitive rates, especially on 15-year fixed options.

Refinance Rates Today: What Borrowers Need to Know

Refinancing rates have also dipped slightly but have remained stable against purchase mortgage rates.

Despite a modest drop in the 30-year fixed refinance rate, the market remains competitive. Those with loans exceeding 7% should keep a close eye on future changes, especially if a Federal rate cut occurs, which would improve the appeal of refinancing options.

The Federal Reserve’s Impact on Mortgage Rates in 2025

The Federal Reserve’s policies have profoundly influenced mortgage rates. The aggressive rate hikes implemented in 2022 and early 2023 raised borrowing costs significantly. By the end of 2024, the Fed’s more accommodative stance—with three rate cuts totaling 1%—began to stimulate economic momentum and stabilize rates through much of 2025.

Despite inflation being above target, signs of easing have emerged, alongside slowing job growth, which currently sits at an unemployment rate of 4.2%. The consensus in the market indicates a 91% probability of a 25 basis point cut in September, which could further impact mortgage rates.

Mortgage Rate Projections and Market Outlook

Various organizations have provided their forecasts for mortgage rates through late 2025 and into 2026:

The consensus indicates rates will likely remain above 6% through 2025, with moderate decreases expected in 2026 as inflationary pressures diminish.

Implications for Homebuyers and Refinancers

While mortgage rates are historically high relative to the lows seen during the pandemic, the recent declines and anticipated Federal Reserve cuts signal an opportune moment for potential homebuyers and those considering refinancing.

For example, on a $300,000 30-year fixed mortgage at 6.52%, the monthly payment totals about $1,895. Should rates fall to 6.0%, that payment would decrease to roughly $1,799, yielding a saving of $96 monthly or $1,152 annually. Such savings underscore the importance of these small shifts in mortgage rates when deciding on loans.

Conclusion: Mortgage Rates on the Rise Again – August 28, 2025

Today’s mortgage rates show a gradual decline, marking a change from prolonged periods of elevated costs. With the economic context hinting at a Federal Reserve rate cut next month, further decreases in mortgage rates may be on the horizon. Long-term projections suggest rates will continue easing but remain above 6% until at least the middle of 2026.

Navigating the complexities of mortgage rates and Federal actions can position borrowers to make strategic decisions aligned with their financial ambitions.

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