Author: Pacific Home Loans

Why Rates Are Dropping

Mortgage rates are moving lower nationwide, and Hawaii homebuyers and homeowners are already starting to take notice. As of early September, the average 30-year fixed mortgage rate dropped to 6.49%, the lowest level in nearly a year. That’s a sharp decline in just one week and over half a percentage point lower than rates at the start of the year.

This drop reflects growing confidence that the Federal Reserve will reduce its benchmark rate later this month, as slowing job growth and easing inflation trends point to a cooling economy. Markets are now anticipating at least a quarter-point cut, with the possibility of more aggressive moves.

Here in Hawaii, where real estate is one of the most competitive markets in the country, lower rates can make a significant difference. The result? More buyers are entering the market, and more homeowners are looking to refinance. In fact, mortgage applications nationwide spiked by 9% in just one week, with refinance requests climbing even higher.

What This Means for Hawaii Borrowers

If you’re considering buying a home on Oʻahu, Maui, the Big Island, or Kauaʻi, or refinancing your current mortgage, this is a window of opportunity you don’t want to miss. Rates could continue to move lower, but they could also rebound quickly depending on the Fed’s announcement and market reaction. Locking in now helps protect you against volatility.

Questions Borrowers Should Ask Now

• What if I lock in a rate and they keep falling?

  Pacific Home Loans offers many loan options that honor a “float-down” option. This allows you to adjust to a lower rate if the market drops after you lock in.

• How does a float-down work?

  Generally, if rates fall by 0.25%–0.50% or more, you may be able to renegotiate for a lower rate, typically for a small fee.

• Is it automatic?

  No. Borrowers must request a float-down before closing.

• Is it worth it?

  Your loan officer will run the numbers and help you decide if the long-term savings outweigh the upfront cost.

Key Takeaways for Hawaii Buyers and Homeowners

• Act now: Rates are at 11-month lows. This is a strong time to get pre-approved and lock in.

• Rate locks = stability: Protect yourself from sudden increases, while exploring float-down options.

• Float-down = flexibility: It’s a safety net if rates dip further, but comes with conditions.

• Compare options quickly: In Hawaii’s fast-moving market, timing is everything.

Next Steps

1. Get pre-approved with a Pacific Home Loans loan officer today.

2. Ask your loan officer about float-down or renegotiation options and make sure you understand the terms when discussing your rate lock options.

3. Monitor Fed news and be prepared to act quickly.

Bottom line:

Mortgage rates in Hawaii are at their lowest levels in nearly a year. Whether you’re refinancing or purchasing, moving decisively now can help you secure the best terms and maximize your savings.

About Pacific Home Loans, Inc.

Pacific Home Loans, Inc., based right here in Hawaii, has been helping local families and investors achieve their real estate goals for over 20 years. Whether you’re buying your first condo, upgrading to a single-family home, refinancing to lower your payment, or investing in property, our team understands Hawaii’s unique market and is here to guide you every step of the way.

📞 Contact Pacific Home Loans, Inc. today at (808) 891-0415 or visit www.pacifichomeloans.com to get started.