Mortgage Rates Drop Below 6.6% as Housing Market Shows Signs of Healing

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News Flash

Mortgage Rates Drop Below 6.6% for First Time Since October

The 30-year fixed rate hit 6.58% this week. That's a 14 basis point drop and the lowest we've seen in nine months.

Why now? Fed officials are getting nervous about that weak jobs report. Michelle Bowman, Fed Vice Chair, is now backing three rate cuts this year.

Refinance applications jumped 30% year-over-year in early August. Smart homeowners are locking in savings while they can.

If the Fed follows through with those rate cuts, we could see even more relief ahead. But timing matters.

The Housing Market Might Actually Be Healing

Remember when everyone said home prices were completely insane? Turns out the market has been quietly fixing itself.

Moody's data shows home overvaluation dropped from 29.4% in Q2 2022 to just 8.3% in Q2 2025. That's across 400+ metro areas.

Take Dallas-Fort Worth. Once the poster child for housing madness, it now has inventory levels not seen in over a decade. Price growth is finally normalizing, even though the area is still overvalued by about 22%.

Regional breakdown:

• South and West: Higher inventory, bigger price drops

• Midwest and Northeast: Limited inventory, stable pricing

The seller's market stranglehold is loosening. Buyers are getting their power back as listings increase and sellers adjust expectations.

The pandemic housing frenzy is officially in the rearview mirror. What we're seeing now looks a lot more like a normal, functioning market.

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More You Should Know

• Multifamily Supply Slows: The U.S. multifamily market anticipates a decrease in new completions to 536,000 units in 2025, from 663,000 in 2024, yet national rent growth remains modest despite historically high supply levels. [Source]

• Title Insurance Embraces AI: The title insurance industry is leveraging artificial intelligence, as highlighted by ALTA's discussions with the Senate Banking Subcommittee and First American Title's new generative AI experience, to streamline processes and cut costs for real estate transactions. [Source]

• Home Affordability Stalls: Homebuyers now need to earn nearly $112,000 annually to afford the typical U.S. home, a figure that has slightly increased overall but decreased in 11 major metropolitan areas like Oakland, CA, and West Palm Beach, FL, due to falling home prices. [Source]

• Healthcare REITs Lead Market: Healthcare REITs are significantly outperforming other real estate investment trusts, with companies like American Healthcare REIT Inc. and Welltower Inc. leading the charge due to favorable demographic trends boosting demand for medical real estate. [Source]

• CRE Finds Mid-2025 Footing: Amid newfound clarity in mid-2025, the commercial real estate market is recalibrating with increased demand for smaller, smarter spaces in both urban and suburban areas, while the multifamily sector continues to demonstrate stability despite a slowdown in construction starts. [Source]

• Developer Confidence Up for Multifamily: Multifamily developer confidence saw an increase in the second quarter of 2025, notably driven by optimism in subsidized affordable housing projects, despite broader market difficulties. [Source]

• Migration Shifts Housing Market: The U.S. housing market is experiencing a significant shift as inbound migration slows in former Sun Belt hotspots like Texas and Florida, while states like New York and California see increased arrivals, contributing to instability in previously booming areas as remote work policies end. [Source]

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