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Buyers of houses waiting for mortgage rates to drop have been cruelly disappointed in the last six months. Aside from an increase in rates in mid-January, where rates fell into the 7%range, they have Remains largely in the high range of 6% Throughout 2025. But there is a chance that could change soon.
Currently, all eyes are on the federal reserve to see if the central bank will reduce its reference rate at its next meeting. The Fed chose to Keep stable rates Recently, but many buyers and house experts speculate if it will lower them soon. This, in turn, could have a significant impact on the place where mortgage rates are then directed, but Fed rate decisions are not the only factor which can have an impact on mortgage rates.
There are many other engines behind mortgage rates trends, leaving questions about the question of whether mortgage rates could increase or drop in August. To get more clarity, we spoke with several mortgage experts to discover How mortgage rates should tend This month and what future borrowers can do to prepare what will happen.
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Will mortgage rates increase or will they drop in August? Here is what loan experts predict
While we are waiting to see what will happen with mortgage rates, it is largely a waiting game to see if the Fed will lower the rate of federal funds. So why has the Fed not yet lowered the rates? This decision was, in part, the result of uncertainty from prices of the current administration, according to Sarah Deflorio, vice-president of the mortgage bank at William Raveis Mortgage.
“The prices shot a bit last week in reaction to the pricing policy of the current administration and Fear that it stirs up inflationBut they also responded well to favorable economic news, “said Deflorio.” It’s a bit of a roller coaster. The story continues to be on the prudent approach of the Fed of inflation – the concerns surrounding the unknown impacts of the prices will maintain them prudent while we are heading towards the end of the year. “”
The Fed has two main objectives with its rate decisions: maintaining maximum employment while maintaining inflation under control. The hesitations to reduce the rate were largely on the fears of an increase in inflation. And, if the Fed has not yet lowered the rates, it is because the central bank believes that the The labor market can continue to maintain At current interest rates, explains Emmanuel St. Germain, CEO of Choice Mortgage Group.
“Although the owner does not agree – and we all want lower rates – until we see a break in these reports, the Fed will probably leave unchanged rates,” explains St. Germain.
According to St. Germain, the Fed is likely to prioritize its double mandate to maintain inflation under control, even with the political pressure increasing. Consequently, potential buyers should not expect August to inaugurate many changes for mortgage rates.
“Most analysts believe that we will not see any rate drop before September, assuming that the number of jobs remains relatively strong. The Fed can be concerned about reduction of early rates, an increase in inflation, but it is important to note that the Fed is generally late in the bowl of punch rather than a proactive body,” said St. Germain.
That said, this is not all bad news. Many analysts expect a drop in rate that is likely to run for the September meeting of the Fed. So if you start Prepare your home purchase nowYou might be just in time to get a lower rate.
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Does the right time to buy or refinance a house?
If you were waiting for a rate drop to buy a house, you may want to rethink this plan. While a drop in rate could Just be at the corner of the street, it is difficult to predict with certainty when it really happens, and many financial experts have missed the brand with rate forecasts throughout 2025. There is therefore no guarantee that mortgage or refinancing rates will be less than one or two months.
Any attempt to timer The interest rate market could mean waiting much longer than you hoped to buy a house, according to Sara Coers, associate director of the IU Center for Real Estate Studies at the Kelley School of Business of the University of Indianapolis. And even if the prices are down, there are still advantage for shopping now.
“A decrease in rates will probably bring buyers to the market and lead to an increase in prices and competition,” explains Coers. “With relatively stable prices and the unpredictable future, there is no time like the present to buy what you can afford on the basis of today’s prices and hope for a refinancing opportunity in the future.”
On the other hand, if you are considering refinancing your current mortgage loan To land a better rate, you could be better expected. With a drop in rate scheduled before the end of the year, there is a chance that you can get a better price if you are waiting for it.
The bottom line
If the purchase of a house is on your 2025 bucket list, it has probably been frustrating to see mortgage rates remain quite stable recently. And with nothing significant in the economy, most experts do not predict a drop in rate of the Fed before August (although we can see one in September).
Rather than synchronizing the rate market, it is logical to focus on the things you can control. Get your credit rating And Debt / income ratio in good condition and Save an important deposit Can help you get the best rates currently available. And, by shopping with a handful of lenders, you will know that you get the best offer.