Mortgage Rates Just Saw Their Biggest Drop in Over a Year

Andrea Ballesteros September 10, 2025

If you’ve been waiting for a shift in mortgage rates, the wait is finally over. Last week, rates made their biggest one-day decline in more than a year—bringing some much-needed good news for homebuyers.

On Friday, September 5th, the average 30-year fixed mortgage rate fell to its lowest level since October 2024. For buyers who have been sidelined by affordability challenges, this is a change worth paying attention to.

What Sparked the Drop?

The decline was tied to the release of the August jobs report, which came in weaker than expected for the second month in a row. That sent signals to financial markets that the economy may be slowing.

Historically, when uncertainty about growth shifts into more clarity—and points toward a softer economy—mortgage rates tend to ease. And that’s exactly what happened here.

Why Buyers Should Care

This isn’t just about one headline—it’s about what this means for your budget.

Take a look at the difference:

At 7% (where rates were back in May), a typical monthly mortgage payment was nearly $200 higher compared to where rates are now.
That’s roughly $2,400 per year in savings.

For many buyers, that difference can mean affording a home that felt out of reach just a few months ago.

How Long Will It Last?

The big question is whether this drop has staying power. Rates will continue to respond to:

Inflation data
Job market trends
Federal Reserve policy decisions

They could move even lower—or bounce back up. That’s why having a trusted agent and lender on your side is key. Together, they’ll help you stay on top of shifts in the market so you can make the most of this window of opportunity.

The Bottom Line

For the first time in months, mortgage rates have broken out of the high 6% range. As CNBC’s Diana Olick puts it:

“Rates are finally breaking out of the high 6% range, where they’ve been stuck for months.”

If you’ve been waiting for a sign, this is it. The biggest rate drop in over a year may give you the chance to buy with more confidence—and more affordability—than you had just a short time ago.

Curious what today’s rates would save you on your monthly payment? Let’s connect and run the numbers.