When Will Mortgage Rates Go Down?

In early 2020, the U.S. labor market saw a historic increase in job losses. To counter rising unemployment, the Federal Reserve provided rate cuts that in turn brought mortgage rates to historic lows. 

Supply chain problems, energy prices, and increased consumer demands led to a sharp rise in inflation in 2021 and 2022. As a reaction to curb inflation, the Fed began to aggressively raise the federal funds rate, leading to a historic high in late July 2023.

In September 2024, the Fed made its first rate cut in over four years — lowering the federal funds rate by 50 basis points to a target range of 4.75%-5.00%. In late 2024, the Fed made two more cuts bringing the funds rate to  4.25%-4.50%.

Throughout 2025, the Fed held rates at these elevated levels, using that pause to assess whether inflation and other pressures were easing. In September they made their first cut of the year, bringing the federal fund rate to 4.00%-4.25%.

This brings us to our current mortgage interest rates. In 2025, the average 30-year fixed mortgage rate has eased to the mid 6% range, down from the 7% range seen through much of 2023 and 2024.

As of September 2025, mortgage rates have fallen to their lowest this year in the low 6% range.

For up-to-date information on mortgage rates today, you can follow daily and weekly updates from Mortgage News Daily, Freddie Mac’s Primary Mortgage Market Survey, the Mortgage Bankers Association, and the Federal Housing Finance Agency (FHFA). These resources track both 30-year and 15-year fixed averages, giving a real-time view of how rates are shifting.

The Consumer Price Index (CPI) is a critical measure of inflation that the Federal Reserve monitors. The U.S. Bureau of Labor and Statistics releases an updated metric monthly. 

The first step to tracking if mortgage rates will go down, is checking to see if the Consumer Price Index (CPI) has decreased. The Fed’s long-term goal is to see inflation back down to 2%.  

As of August 2025, headline inflation (all items) is about 2.9% year-over-year and core inflation (excluding food and energy) is roughly 3.1%. These figures are down from earlier peaks but remain above the Fed’s target.

The next catalyst that can impact mortgage rates dropping is the federal funds rate. The Federal Open Market Committee (FOMC) meets eight times throughout the year to set the federal funds rate. They hold a press conference and send out a news release following these meetings.  

The FOMC is a 12-member committee and part of the Federal Reserve System (the Fed). During the meetings, the FOMC reviews economic data, discusses economic and financial developments, and decides whether to change or maintain the target range for the federal funds rate. 

If the Fed feels confident in decreases to the CPI, this may cause them to drop the federal funds rate. This decrease in the federal funds rate is what can impact a decrease in mortgage interest rates. 

Tracking the outcomes of both the monthly Consumer Price Index (CPI) release and the FOMC meetings is how you can predict what will happen to mortgage interest rates. 

To best track updates to the CPI and federal funds rate, below are important upcoming dates to monitor. These include both the next Fed meetings along with the latest CPI releases.