Mortgage rates remained unchanged this week after a significant drop to a 10-month low, as markets anticipate an imminent Federal Reserve interest rate cut.

The average 30-year fixed mortgage rate stayed at 6.58% for the week ending Aug. 21, matching the previous week, according to Freddie Mac. A year ago, rates averaged 6.46%.

“Over the summer, rates have come down and purchase applications are outpacing 2024,” said Sam Khater, chief economist at Freddie Mac. “However, many buyers remain on the sidelines waiting for further decreases.”

The stability in mortgage rates follows Fed Chair Jerome Powell’s comments at Jackson Hole, signaling a possible rate cut in September. Powell noted that risks are shifting away from inflation toward rising layoffs.

STORY HIGHLIGHTS

• 30-year fixed mortgage rate: 6.58% (unchanged from last week)

• Possible Fed rate cut: Expected at Sept. 17 FOMC meeting

• Market sentiment: Futures traders assign 85% probability to a quarter-point cut

• Trump criticism: President Trump blasts Powell over high rates

• Housing market outlook: Lower rates could boost fall home sales

• Key factor: Fed does not set mortgage rates directly

Powell Signals Policy Shift

Powell indicated that the “balance of risks” could justify policy changes, saying:
“Risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation. Nonetheless, the shifting balance may warrant adjusting our stance.”

Markets are betting heavily on a quarter-point cut at the Sept. 17 FOMC meeting. Futures traders now see an 85% chance of a reduction.

Trump Turns Up the Pressure

President Donald Trump has repeatedly criticized Powell for not cutting rates, claiming the Fed’s stance is hurting the housing sector.
“People can’t get a mortgage because of him,” Trump posted. “There is no inflation, and every sign points to a major rate cut. ‘Too Late’ is a disaster!”

Since December 2024, the Fed has kept its benchmark rate between 4.25% and 4.5%, despite political pressure.

Impact on Housing Market

Mortgage rates near 10-month lows could lift buyer confidence heading into fall.
“It’s been a cruel summer for buyers, sellers, and builders,” said Jake Krimmel, senior economist at Realtor.com. “But a mix of lower rates and easing uncertainty could jumpstart the market.”

However, a Fed cut won’t guarantee immediate relief. Mortgage rates are influenced by factors such as 10-year Treasury yields, inflation expectations, and overall market trends.

How Mortgage Rates Are Determined

Rates hinge on Treasury bond yields, which move with economic growth and inflation signals. When inflation rises, yields and mortgage rates climb. When inflation cools or labor markets weaken, rates tend to fall.

Lenders also weigh personal financial factors:

• Credit score

• Loan amount and type

• Down payment size

• Loan term

Borrowers with stronger profiles usually secure lower rates, while higher-risk borrowers pay more.

Mortgage rates holding steady at 6.58% signals a pivotal moment for the housing market. With the Federal Reserve’s potential rate cut in September, buyers could soon see improved affordability and renewed market activity. Still, the Fed does not directly set mortgage rates, and multiple economic factors—including Treasury yields, inflation expectations, and borrower profiles—will determine how quickly relief reaches homebuyers. For now, all eyes remain on the Sept. 17 FOMC meeting for the next move.

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