Balance Returns as Rates Ease
By mid September mortgage rates had fallen to their lowest levels since late 2022. The average 30-year fixed dropped to about 6.13% down from peaks above 7% earlier this year. That shift fueled a surge in refinancing with applications up nearly 60% from the prior week and 70% higher than a year earlier according to the Mortgage Bankers Association. Refinances now account for nearly 60% of all mortgage activity with homeowners carrying larger balances leading the charge. Adjustable-rate mortgages also grew in popularity reaching their highest share since 2008 as borrowers sought initial rates three quarters of a point lower than fixed loans.
The Federal Reserve added momentum with its first rate cut since 2024 lowering the benchmark federal funds rate by a quarter point. While mortgage rates are tied more closely to Treasury yields than directly to the Fed this cut signals a broader trend. Variable rate borrowers such as those with credit cards or certain loans should see relief more quickly. For mortgages the immediate change may be modest but expectations for continued cuts through 2025 and 2026 are likely to keep gradual downward pressure on rates.
On the ground our team began seeing this shift weeks before it made headlines. In August we were suddenly putting homes into escrow at a pace not seen in quite some time. Because of the volume we handle across every price point we often recognize market momentum early. That instinct was confirmed when RMLS data showed sales up 10% year over year in August. National coverage is now echoing the same message the housing market is showing clear signs of renewed activity.
For buyers this creates a rare opening. Acting before competition intensifies provides a chance to secure the right home without bidding wars and refinancing opportunities down the road. For sellers increased buyer demand and easing affordability headwinds can make listing now a strategic move.
If you or someone you know is considering buying, selling, or refinancing let’s connect today! I can help you evaluate your options, run the numbers and put a strategy in place so you are positioned to benefit from this evolving market.
