Market Update: Mortgage Rates Slide to 10-Month Lows

Blog posted On August 05, 2025

Big news for mortgage rates! Over the past couple of months, they were relatively unchanged. But over the past week, they’ve been on the sharpest downward trend since April, bringing them to the lowest levels since October 2024. Could this be the shift we’ve been waiting for? Will rates continue their descent? Why are they trending lower? Let’s talk about it.

Why are mortgage rates trending lower?

Mortgage rate movement is a trickle-down effect that starts with economic data. The flow of events typically looks like this:

                  Economic data is released → Bond market reacts → Mortgage rates move

The relationship between the three typically looks like this:

Worse economic data → Stronger bond market → Lower mortgage rates

This is exactly what happened on Friday. There are few economic reports that tend to have a bigger impact on rates. The collection of reports known as the employment situation arguably has the single largest impact on bonds and rates. "No other economic report has as much power to cause volatility in rates, for better or worse,” notes Matthew Graham of Mortgage News Daily. Why? The employment situation gives traders an overall pulse of the economy based on important data like the unemployment rate and nonfarm payrolls. If it comes in with strong numbers, it generally means the economy is doing alright. If it comes in below expectations, it generally means the labor market is softening and the economy is weaker. For the first time in a while, the employment situation came in below expectations on Friday. The trickle-down effect caused a surge in the bond market and a drop in mortgage rates.

What this means for rates going forward

Many experts have been warning people that the economy will likely slow down soon as a result of tariffs and other big impact policies. It was only a matter of time before the data came through to support these claims. The employment situation reports could signal the start of a greater slowdown, which could help rates continue their descent. But their July data could also just be a blip on the radar. A lot will depend on what the data looks like in the coming months.

Something else to keep our eyes on is the Fed’s interest rate decision in September. Many economists think they will cut the benchmark rate at that meeting. If the market sees this as an increasing possibility, it could preemptively integrate this into its pricing, which could put downward pressure on rates.

What to do next:

1. Consider a rate lock: If you’re debating buying a home soon, you might consider locking in your rate now just in case they trend higher. And if they fall more, you can take advantage with a rate float down.
2. See if you’re eligible for a no-lender-fee refinance: If you purchased a home in later winter/early spring, you likely have a higher rate than the current market rates. But don’t worry — you also have Rate Rebound, which will let you refinance to the current rates without the typical lender fees.*
3. Jump in before it’s too hot: If this is the start of a greater trend lower for mortgage rates, then it could be a great time to buy. If rates continue falling lower this fall, then everyone will be trying to buy, which brings more competition, potential for bidding wars, and higher prices. And like we mentioned above, you can still buy now and refinance later with no lender fees to take advantage of lower rates if they continue to fall.
4. Schedule a free mortgage consultation/check in: Above all, if you have any questions and want to talk them out, we’re always here. We can take a look at the numbers and help you decide if now is a good time to buy/refi or not.

Sources: Mortgage News Daily,

*CMG Home Loans will cover all customary lender fees which are lender administrative fees, tax service fees, appraisal fee and credit report fee. This offer does not cover discount points. Credit cannot exceed total fees. Rate Rebound is only valid on future conventional conforming, government, and jumbo loans in our retail channel (future Construction Loans, All in One, HELOCs, Bond or HFA loans are excluded). Rate Rebound is only available on loans originated by CMG Home Loans. There may be additional restrictions based on investor. Offer may not be redeemed for cash or credit and is nontransferable. Offer cannot be retroactively applied to any loans. Offer may not be used with any other discounts, promotions or interest-only/buy-down and second lien products. This offer is subject to changes or cancellation at any time at the sole discretion of CMG Home Loans. Additional restrictions/conditions may apply. This is not a commitment to lend and is contingent on qualification per full underwriting guidelines. Program will be available on loans disclosed on or after 11/1/22. Program is applicable for refinances 6 months after closing up to 5 years from original note date and with a net tangible benefit which includes a rate reduction of 0.5%, going from an ARM to fixed rate, reducing loan term, movement to a more stable product, or a lower principal and interest payment. By refinancing the existing loan, the total finance charges may be higher over the life of the loan.