Mortgage interest rates have stayed flat this week. The average 30-year fixed rate hasn’t changed at all and is 12 basis points higher than this time last year. This could leave potential home buyers wondering, “Is this a good time to buy a house?”

Now could be a good time to buy, as far as interest rates go, because experts don’t expect rates to plummet before the end of the year. If you want to buy, you need a strong financial footing, a decent-sized down payment, and a focus on lower fees to partly compensate for the higher initial mortgage rate. And remember, you can always refinance your mortgage later.

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Are mortgage rates dropping?

As of August 21 this year, Freddie Mac reported that rates for 30-year fixed-rate mortgages were 6.58%. Although they haven’t moved since last week, they’re still up 12 basis points from last August. This time last year, mortgage rates were averaging 6.46%.

Considering rates are still above 6.5%, we get it if you feel like you can’t catch a break in the current economy

In situations like these, it pays to look at the numbers. Here’s the Freddie Mac data on mortgage rates for the past 52 weeks as of August 7, 2025:

30-year fixed-rate mortgage: 6.08% to 7.04%

15-year fixed-rate mortgage: 5.15% to 6.27%

If you just go by the numbers, rates on both 30-year and 15-year fixed-rate mortgages remain mostly below the highs noted above. So, yes, mortgage rates have decreased incrementally over the past year. Will they keep dipping? That remains to be seen.

Dive deeper: Will mortgage rates go back up to 7%?

So, will mortgage rates go down at all this year?

If you’re looking for a substantial interest rate drop in 2025, you’ll likely be left waiting. The latest news from the Federal Reserve and other key economic data point toward steady mortgage rates on par with what we see today.

The latest from the Federal Reserve

When the Fed — the common nickname for the Federal Open Market Committee (FOMC) — held its July 2025 meeting, it voted to keep the federal funds rate the same for the time being. After cutting its rate three times at the end of 2024, it has yet to slash the rate in 2025.

That federal funds rate tends to directly influence rates on shorter-term lending. While mortgage rates aren’t directly based on the fed funds rate, they typically mirror fed fund rate trends. So, if the fed funds rate goes up, mortgage rates will likely follow. The inverse is also true.

The next Fed meeting is set for September 16 and 17. According to the CME FedWatch tool, there’s roughly a 72% chance that the fed funds rate will decrease at this meeting. If economists continue to expect the Fed rate to drop, mortgage rates will probably go down in the weeks leading up to the meeting. However, the decision is almost a month away, so take this outlook with a grain of salt. A lot can happen before mid-September to impact the Fed’s decision.

Learn more: How the Fed rate decision impacts mortgage rates

The latest on 10-year Treasury yields

While short-term lending rates closely follow the fed funds rate, mortgage rates more closely follow the 10-year Treasury yield. As of Aug. 19, the 10-year Treasury yield sat at 4.30% — up from 3.86% a year prior.

You’re probably wondering why today’s mortgage rates aren’t in the 4% range, right?

To determine current mortgage rates, lenders add a “spread” to the 10-year Treasury yield. The spread is simply the difference between the rates consumers pay and the rate on the 10-year Treasury. Without getting too much into the weeds, charging a spread helps mortgage lenders cover costs associated with making loans to the public and the risk of providing such loans.

For example, today, the average 30-year fixed mortgage rate is 6.58%, and the 10-year Treasury yield is 4.30% — a spread of 2.28%.

Read more: When will mortgage rates finally go back down to 5%?

Should you wait to buy until mortgage rates go down?

In short, no. You probably shouldn’t wait to buy a home until mortgage rates drop. Mortgage rates are just one part of the affordability equation. You also have to consider home prices, a factor of housing supply and demand.

The current housing market is in a crunch. To put it simply, buyers outnumber homes for sale, especially homes in price ranges accessible to the first-time home buyer. When supply and demand are out of balance like this, home prices tend to remain high since sellers know they’ll have multiple buyers interested.

According to data from the Federal Reserve Bank of St. Louis, the median sale price of single-family homes has generally trended upward since Q1 of 2009. At that time, the median sale price was $208,400. The median price had risen to $410,800 by Q2 2025.

While recession chatter has recently increased, prospective buyers likely won’t see much relief in a true recession. If interest rates drop like they tend to do in recessions, that will increase the number of people looking to buy and lock in a lower interest rate. That drives up demand for the already limited supply of homes.

To truly save, buyers need both interest rates and home prices to drop. Mortgage rates are inching down this month, and housing prices are stagnant or even lowering in certain parts of the country. Still, rates are higher than they were this time last year, and prices are still increasing in many cities. Situations may be improving for buyers, but there’s a lot of work to be done.

Keep reading: Do mortgage rates go down in a recession?

Strategies for buyers in today’s mortgage market

If you crave the comforts of homeownership, the best strategy in today’s market may be to buy what you can afford. Whether that means a smaller house or a condo instead of a single-family home, owning something puts you in a position to start building equity.

Yes, shopping for the best mortgage lenders with low rates and fees is crucial when getting a mortgage. But to help you find your ideal home that balances affordability and desirability, it pays to adopt a curious mindset and consider lesser-discussed financial tools.

Get curious

There’s no better time to learn more about your local real estate market than today. By adopting a sense of curiosity, you could discover that your city has more to offer housing-wise than you previously thought.

You may want to take weekend excursions to lesser-known neighborhoods and suburban developments beyond the city limits. You never know what you’ll find that could expand your idea of what “home” looks like — including new developments, school districts, and types of homes.

Learn more: This map shows average mortgage rates by state

Consider a fixer-upper

If you’re looking to spend less on a home in today’s mortgage market, a house needing a bit of TLC could help you do just that. Loans like the FHA 203(k) mortgage can roll your purchase and renovation costs into one convenient loan. When you qualify and have an accepted offer, your lender immediately funds the home’s purchase price and puts the cost of renovations into an escrow account. As you make repairs, funds get dispersed.

Rethink your commute

How would it feel to have a longer commute yet come home to a house you love? Master-planned communities tend to crop up outside major cities, offering amenities like parks, shopping, and top-notch schools — all in exchange for a longer commute. These areas could look a lot more palatable if they offer commuting options like park-and-ride or commuter rail. Dare to consider parking the car and taking public transit if it could get you into the home of your dreams.

Go condo

While shared walls, floors, and ceilings might not immediately scream “dream home,” they could help you find an affordable home in a terrific area. Condominiums come in various shapes and sizes, from apartment-style flats to townhomes. Depending on the area, you might even score a small backyard. However, be sure to consider HOA fees when calculating your monthly payment.

Consider a 15-year mortgage

While the monthly payment on a 15-year mortgage will be higher than the typical 30-year, these loans have plenty of upsides. Not only will you pay off your home on a speedier timeline, but you’ll also likely score a lower interest rate and save a ton on interest over the life of your loan.

Explore rate buydowns

To make today’s mortgage rates more palatable, look into rate buydown options. An interest rate buydown lets you pay cash up front in exchange for a reduced interest rate on your mortgage. Buydowns can be permanent or temporary (for your loan’s first one to three years, for example). Even a few years of lower rate relief can make today’s home prices more affordable.

Learn more: What will mortgage rates do over the next five years?

When will mortgage rates go down? FAQs

How soon will mortgage interest rates go down?

Mortgage rates probably will not drop significantly before autumn. The August Fannie Mae Housing Forecast predicts that rates will continue to decrease gradually but will stay above 6% throughout 2025 and 2026.

Is 7% a high mortgage rate?

Compared to historical mortgage rates, 7% isn’t considered a high rate. While it might be high compared to pandemic-era rates that were sub-3%, it’s on par with mortgage rates in the 1990s, and considerably lower than the double-digit rates seen in the late 1970s and early 1980s.

Is it impossible to get a 3% interest rate on a mortgage?

It’s not impossible to get a 3% interest rate, but doing so requires the perfect set of circumstances. You’d need to find a homeowner with an assumable mortgage — one that can be passed to a new owner at the same interest rate as the original loan. Assumable mortgages are generally government-backed loans from agencies like the VA, FHA, or USDA.

Laura Grace Tarpley edited this article.

Key Takeaways Potential homebuyers and President Donald Trump have wanted the Federal Reserve to cut its influential interest rate in the hope that mortgage rates would fall in response.

However, economists and analysts say that mortgage rates are unlikely to fall meaningfully below 6.5% in the near future because of the bond market’s influence.

Bond traders would likely help bring long-term rates down if they felt the economy was in danger of a downturn.

Softer economic data make Federal Reserve interest rate cuts more likely, but that doesn’t mean mortgage rates will follow them down.

Homebuyers and those looking to refinance may have to wait longer for interest rates on 30-year mortgages to fall meaningfully below 6.5%, according to economists and market analysts.

The bond market is propping up mortgage rates, as traders are betting the Fed may only lower rates a few times rather than undertake an aggressive cycle of rate cuts. If there were signs that tariff impacts would significantly damage the economy, the Fed would have more wiggle room to cut interest rates aggressively, and bond traders would likely help bring long-term rates down.

Right now, analysts say, the economy doesn’t seem to be weakening enough to warrant that type of action—if it even gets to that point at all in the coming months.

“For the foreseeable future, it really does feel like mortgage rates are going to be staying pretty close to where we are,” said Chen Zhao, head of economics research at Redfin.

Mortgage rates could even rise if tariffs end up pushing up inflation substantially, Zhao said.

If so, markets’ expectations of Fed cuts would diminish, keeping rates elevated. One potential harbinger of that scenario came on Thursday, when new data on inflation for producers rose far more than expected, raising the prospect that businesses will pass on price increases to consumers.

Fed Actions Only Have Indirect Impact

Fed cuts would immediately make borrowing cheaper on credit cards and auto loans, since those products are based on the short-term interest rates the central bank heavily influences. Mortgages are a different story, however.

Rates on a 30-year mortgage are based heavily on investors’ expectations of the economy and inflation over the next decade, not on the Fed’s near-term actions.

While mortgage rates include other costs to process each loan, they rely heavily on the benchmark 10-year U.S. Treasury yield—the interest rate that the U.S. government pays to issue debt over 10 years. A complex mix of factors helps determine 10-year yields, including economic growth forecasts, inflation, demographics, and U.S. fiscal deficits.

“By no means am I saying that a Fed rate move does not affect mortgage rates at all,” said David Gottlieb, a wealth manager at Savvy Advisors who focuses on real estate, but the central bank only has “an indirect pressure” on long-term rates.

It’s a point that Fed Chair Jerome Powell—who’s faced attacks from President Donald Trump for keeping interest rates high and dampening the mortgage market—made at his news conference last month.

“We don’t set mortgage rates at the Fed,” Powell said. “It’s not that we don’t have any effect. We do have an effect, but we’re not the main effect.”

Bond Market is Hard to Please

Some Fed officials still seem hesitant about cutting rates in September, but markets are more or less viewing a rate cut next month as a slam dunk, analysts say. Some observers have suggested that the Fed could cut rates by 50 basis points rather than its usual quarter-point decrease.

But a supersized rate cut could “send a panic message,” Andrew Brenner, head of international fixed income at NatAlliance Securities, wrote in a note to clients.

Last year, for example, the Fed opted for a 50 basis point cut after deciding inflation had ticked down enough from its post-COVID highs. Rather than also heading downward, the 10-year Treasury yield—and thus mortgage rate —rose sharply, he wrote.

Bond investors “pushed back hard against the Fed’s easing because they correctly perceived that the economy and labor market were in better shape than feared by Fed officials,” Ed Yardeni, an economist and president of Yardeni Research, wrote in a note to clients.

Bond vigilantes “may be lurking” again, he wrote, referring to the term he coined to describe bond investors who protest potentially unwise policy actions by driving up interest rates.

The Trump administration wants aggressive Fed action, with Treasury Secretary Scott Bessent on Wednesday calling for a 50 basis point rate cut in September and more after that.

But long-term yields don’t always move in the direction presidential administrations want them, Yardeni cautioned.

“The Trump administration is pushing for the Fed to cut the federal funds rate to reduce the long-term borrowing cost of the federal debt and to lower mortgage rates,” Yardeni wrote, but last year’s experience “serves as a cautionary tale.”

Here are the 3 steps to take with your money

The Fed may lay the groundwork for a rate cut in the fall

Here are the 3 steps to take with your money

The Fed may lay the groundwork for a rate cut in the fall

The Federal Reserve is preparing to go another month without cutting interest rates, fully knowing that one person in particular won’t be very happy about it: President Donald Trump.

In the run-up to the Fed’s July meeting, the White House has unleashed its fiercest pressure campaign yet on the central bank and Chair Jerome Powell. Trump says Powell is “too late” and “playing politics” — accusing him of cutting rates to help the economy during election season last fall but keeping them steady now that he’s president. The Trump administration has recently seized on the ballooning $2.5 billion renovation of the Fed’s headquarters as possible evidence of mismanagement.

Trump in mid-July even discussed with congressional Republicans the concept of firing Powell, and according to reports from CBS News, he showed them a letter that he had already drafted. The president denied that report, and his allies have since softened that rhetoric, with Treasury Secretary Scott Bessent saying he sees no reason for Powell to step down. Still, tensions are high, and one of the nation’s top economists shocked Wall Street when he said Powell should resign to protect the Fed’s independence.

The Federal Open Market Committee (FOMC) must ignore those attacks to prove that it isn’t political as it discusses what to do with its key benchmark interest rate, according to experts interviewed by Bankrate. Powell, meanwhile, will likely only wade into the political talk at the Fed’s post-meeting press conference to reiterate his plans to stay on the job.

“You have to try to just ignore it and not talk about it,” said Bill English, a professor at the Yale School of Management who attended FOMC meetings throughout his more than two-decade stint at the Fed’s board of governors. “He’ll just say, ‘We’re thinking about our mandate and trying to get policy right.’ That’s a hard enough job.”

Trump’s battle with Powell may steal the spotlight from interest rates this week, but Fed officials could begin laying the groundwork for their next rate cut. Several policymakers have indicated they still recommend cutting interest rates later this year, and the Fed is still penciling in a median of two cuts.

The idea of a September rate cut is very much on the table because we get two more employment reports and two more rounds of inflation data. But if the labor market hangs tough and we see evidence of tariffs influencing inflation, then September is going to come off the board. — Greg McBride, CFA, Bankrate chief financial analyst

Here’s what to expect from the Fed’s July meeting — and what you should do with your money amid the volatility.

1. Inflation uncertainty from tariffs is still keeping the Fed on hold

The latest inflation data vindicated the Fed officials who had been warning that Trump’s massive tariffs could push up inflation. Prices last month jumped the most since February, with the overall inflation rate rising to 2.7 percent, according to consumer price index (CPI) data from the Bureau of Labor Statistics for June.

Tariffs left an obvious mark. Annual inflation rates on many of the items that are typically imported — appliances, toys, household furnishings and furniture — hit the highest in more than two years. Goods inflation was responsible for more than a third (38 percent) of overall inflation last month.

More price hikes could be coming. For example, vehicles that dealers ordered after tariffs took effect began hitting lots in late June, according to Diane Swonk, chief economist at KPMG.

“We may be in an inflection point,” said Raphael Bostic, president of the Atlanta Fed, in public remarks shortly after the CPI report’s release. “Over the last several months, the inflation data has come in really in a very nice way, very close to target. But this most recent CPI print really is sending a different message.”

Fed officials are likely to cite the latest inflation data as reasoning for keeping rates steady in July. They want to be sure they don’t repeat past mistakes from the pandemic, when they kept rates too low for too long under an assumption that inflation was only temporary.

Other data suggests to the Fed that the U.S. economy doesn’t currently need rescuing. Consumer spending at restaurants and retailers was stronger than expected last month, and weekly claims for unemployment insurance (UI) have bounced lower for six straight weeks.

“There’s really no rush to ease policy further,” said Sal Guatieri, senior economist and director of economics at BMO, who formerly worked at the Bank of Canada. “The Fed does have the luxury of time to get more data, to get more clarity on future trade policies, before making a decision.”

It’s more than just Powell who thinks that the Fed should keep interest rates steady. All Fed officials have been in agreement that the FOMC should keep interest rates alone this year — at least so far.

“It’s going to take time for the tariffs to settle,” said St. Louis Fed President Alberto Musalem, during a July 10 public appearance. Musalem also has a vote on policy this year. “As we progress through the year, I’m going to get more comfortable understanding what the total impact of tariffs may be.”

2. Two top Fed officials are preparing to dissent against Powell

But divisions could soon be coming.

Fed Governor Christopher Waller has left no room for ambiguity: He’s going to vote for an interest rate cut in July, and if the rest of the committee isn’t persuaded, he’ll dissent against its choice to leave borrowing costs alone.

I believe it makes sense to cut the FOMC’s policy rate by 25 basis points two weeks from now. Looking across the soft and hard data, I get a picture of a labor market on the edge. We should not wait until the labor market deteriorates before we cut the policy rate. — Fed Governor Christopher Waller, on July 17

He isn’t alone. Minutes from the Fed’s June meeting indicated that a “couple” of participants would be open to considering a rate cut in July. If Fed officials’ recent public remarks are any guide, that second Fed official is likely Governor Michelle Bowman.

“Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market,” she said back in late June.

Dissents from Waller and Bowman, both Trump appointees, would mark rare monetary policy division. Regional reserve bank presidents are far more likely to dissent against the chair than Fed governors, historical data from the St. Louis Fed shows. Since 2000, Fed governors have dissented just four times — compared to 89 times for presidents. The last time two Fed governors dissented against the chair, meanwhile, was December 1993.

The most recent governor to dissent against the chair was Bowman herself. Back in September, she preferred to cut interest rates by just a quarter of a percentage point, not the half point that her colleagues on the committee approved.

How much trouble that could prove to be for Powell, though, remains to be seen. When asked about dissents, Powell usually reiterates that he welcomes differing opinions and sees debates as a way to avoid groupthink.

“It’s not that surprising that they’re getting to a place where there is disagreement,” English said. “They think they’re on a trajectory to cutting rates, but when is the right moment to do that? That’s always going to be a hard decision.”

Fed speak round-up: What others officials on the FOMC have been saying about interest rate cuts

My modal outlook has been for some time that we would begin to be able to adjust the rates in the fall, and I haven’t really changed that view. — San Francisco Fed President Mary Daly, on June 26

Given the stability in the employment side of our mandate, with the unemployment rate still at historically low levels, elevated short-run inflation expectations and goods inflation rising due to the upward pressure from tariffs, I find it appropriate to hold our policy rate at the current level for some time. — Fed Governor Adriana Kugler, on July 17

We are seeing things underlying in the economy that suggest that inflation pressures are up and that’s really a source of concern. … Right now, I would wait. — Atlanta Fed President Raphael Bostic, on July 16

We don’t have to cut and then just go on a tear for meeting after meeting. The whole idea for me is get started, get ahead of things before it starts. If you wait until the labor market deteriorates, you’re too late. It’s over. — Fed Governor Christopher Waller, on July 17

3. The Fed may still lay the groundwork for a rate cut this fall

Even though they’re not being as aggressive as Trump wants, Fed officials have said for months now that they expect to cut interest rates this year. Many investors are starting to think that the next rate cut may happen in September, according to CME Group’s FedWatch tool.

“One of the ways you can make a policy mistake is to wait for something to materialize that doesn’t,” said San Francisco Fed President Mary Daly on July 10. “It’s useful now to sort of recognize that waiting for inflation to rise or become persistent could leave us behind in terms of adjusting the policy rate, and I don’t want to be doing that.”

That timing would line up with the data Fed officials say they still need. By their September gathering, officials will be able to see two more inflation reports and two more snapshots on the U.S. labor market.

“If they don’t move at this meeting, they could hint pretty broadly that, if the data are good, they’ll be cutting at the next meeting,” English said.

With uncertainty still clouding the U.S. economy, the FOMC may also not be ready to send a strong signal.

“It wouldn’t surprise me at all if someone came to us from the future and said, ‘the economy is doing just fine. The Fed is not cutting interest rates in September,’” McBride said.

It’s an uncertain moment for the Fed — and consumers. Here are the 3 best steps to take

How soon the Fed cuts interest rates has big implications for your pocketbook. In one way or another, all borrowing costs in the U.S. economy are influenced by the Fed’s key interest rate, such as the price you pay to finance a car or a home renovation as well as purchases on a credit card.

The reason for those rate cuts, though, matters for your money, too. Lenders tend to pull back in times of economic uncertainty, and lower rates might not sway borrowers to make a big-ticket purchase if they’re simultaneously worried about losing a job.

The window for the Fed’s “good news” cuts — that is, cuts because inflation is slowing and not because the U.S. economy is turning a corner — may be starting to close, according to McBride.

“I doubt you’ll see material and sustainable improvement in inflation between now and the September Fed meeting,” he said. “But the labor market situation could be perceived much differently on the other side of the next two employment reports than it is right now.”

If you’re hoping to finance a big-ticket purchase this year or are worried about the state of the economy, McBride recommends focusing on what you can control.

Build up your emergency fund Caret Down Icon It’s already harder to find a new job than it was three years ago, and weaker labor markets typically increase the risk of job loss. That’s why financial planners recommend establishing an emergency fund, ideally covering six months of expenses. After years of elevated inflation, though, your budget may feel pinched. A review of your monthly spending may be an easy place to start. Eliminate any items (like subscriptions, services or other discretionary items) that you don’t need right now, and redirect those savings toward your emergency fund.

Keep your cash in a liquid — and competitive — account Caret Down Icon Yields on certificates of deposit (CDs) are still among the most competitive in years — but locking up funds you might need for an unexpected expense won’t help. At the same time, your savings will barely grow in a brick-and-mortar bank paying next to nothing. A better home for your emergency fund could be a high-yield savings account. Bankrate’s top picks for July are still offering 4 percent APY or more, translating to bigger earnings and a faster path to that ideal six-month cushion.

Eliminate your exposure to high interest rates Caret Down Icon Americans with high-interest credit card debt have been paying the biggest price in today’s high-rate era — literally. Credit card rates hit record highs after the Fed hiked rates to the highest level in more than two decades to quell post-pandemic inflation. And even after the Fed’s full percentage point worth of cuts last year, they’re still hovering above 20 percent. Balance-transfer cards or nonprofit credit counseling services can help you speed up your repayment. Those services will pay off your credit card, for a fee, and then offer you a window of time to pay down your balances with little-to-no interest.

“When the Fed cuts interest rates, rates on debt tied to the prime rate, like home equity lines of credit and credit cards, typically drop soon after,” Yahoo Finance noted. “But the rates on standard 30-year fixed mortgages aren’t linked to prime, and often don’t react much.”

Instead, mortgage rates are more closely tied to the 10-year Treasury yield, which has risen to 4.29% from 3.90% a year earlier. Lenders add a “spread” to those yields to account for risk, resulting in today’s average mortgage rate of 6.58%.

Volatility ahead of September

Several data releases in the coming weeks—including hiring reports and inflation readings—could push rates higher or lower before the Fed meets. “A lot of times, the market prices in expectations,” Bogdan Toderut, a loan officer with Summit Funding in Georgia, told Yahoo Finance. “When you see the big changes, you see them when expectations weren’t met.”

Some lenders are already fielding calls from prospective buyers waiting to see if rates will fall further in September. “It’s my least favorite thing to hear,” said Taylor Sherman, a mortgage loan originator in Tucson, Arizona. “Yes, Fed policy determines rates, but it’s really about how the market views Fed policy.”

Affordability and housing supply

Even with rates easing slightly, affordability remains stretched. A buyer with $3,000 a month to spend on housing now has roughly $20,000 more purchasing power than in May, when rates topped 7%, according to Redfin. Still, home prices remain elevated. The Federal Reserve Bank of St. Louis reported that the median price for single-family homes reached $410,800 in the second quarter of 2025.

A funny thing happened when the Federal Reserve began cutting interest rates last fall: Mortgage rates actually rose.

Now, the central bank is gearing up to cut benchmark interest rates again, and there’s a chance something similar could happen once more.

The reason? Today’s mortgage rates already reflect expectations about the Fed’s next move: This week, they hit 6.58%, the lowest level since October 2024.

A number of economic data releases between now and the Sept. 16-17 meeting could lead to rate swings in the coming weeks. The relationship between the Fed’s rate cuts and mortgage rates isn’t direct, and mortgage rates are sensitive to a number of other factors, most notably bond yields.

Read more: How does the Fed rate decision affect mortgage rates?

For mortgage industry professionals, moments like this can be a frustrating time to be in business. Mortgage rates stayed stuck in the high 6% area for most of this year, stymying affordability-stretched buyers and keeping refinancing action limited. Now that rates are finally moving lower, they’re fielding more calls from prospective clients.

But many customers say they want to wait until September to move forward, in hopes that rates will drop further.

“Oh my gosh, it’s my least favorite thing to hear,” said Taylor Sherman, a mortgage loan originator at Barrett Financial Group in Tucson, Ariz. “I’m like, ‘Well, you know, that’s already priced in.’ Yes, Fed policy determines rates, but it’s really about how the market views Fed policy.”

When the Fed cuts interest rates, rates on debt tied to the prime rate, like home equity lines of credit and credit cards, typically drop soon after. But the rates on standard 30-year fixed mortgages aren’t linked to prime, and often don’t react much. Sometimes, like last year, mortgage rates even move higher.

Mortgage rates are influenced primarily by 10-year Treasury yields, which move in response to a range of factors like market expectations about inflation, future government borrowing, and what the Fed is doing. Mortgage spreads — the difference between the 10-year yield and prevailing mortgage rates — also play an important role in rates and vary based on other factors like market volatility and demand for mortgage bonds.

Read more: What is the 10-year Treasury note, and how does it affect your finances?

According to CME FedWatch, traders currently see an 85% chance of a rate cut in September. Those odds are essentially baked into today’s mortgage rates, but rates could still oscillate between now and then for a number of reasons. Before the Fed acts, new economic data on August hiring and producer and consumer inflation will be released. Earlier this month, weak jobs data in particular helped push mortgage rates to their current year-to-date lows.