Mortgage rates in the U.S. have fallen to their lowest levels in over a year, spurring a surge in refinancing activity. As of October 24, 2025, the national average for a 30-year fixed-rate mortgage stood at 6.19%, down 35 basis points from a year earlier, according to Freddie Mac. The 15-year rate also dropped to 5.44%, reflecting broader easing in borrowing costs. "Mortgage rates continued to trend down this week, hitting their lowest level in over a year," said Sam Khater, Freddie Mac's chief economist. The decline has pushed refinancings to account for more than half of all mortgage activity for six consecutive weeks, with Zillow data showing refinancing rates for 30-year fixed loans at 6.24%, according to
.
The drop in rates follows a series of Federal Reserve rate cuts and moderating inflation, which have eased pressure on the housing market. The 10-year Treasury yield, a key benchmark for mortgage rates, fell to 3.996% from 3.989%, while economic indicators like the Consumer Price Index (CPI) and Purchasing Managers' Index (PMI) showed mixed signals. Rick Sharga, president and CEO of CJ Patrick Company, noted that "further slowing in the U.S. economy and a weakening jobs market could force the Fed's hand to cut further and faster, which would likely lead to lower mortgage rates as we approach the end of the year," The Mortgage Reports noted.
The impact of lower rates is already visible in the housing market. Existing-home sales rose 1.5% in September to a seasonally adjusted annual pace of 4.06 million units, the National Association of REALTORS® reported. The 30-year fixed mortgage rate averaged 6.35% in September, down from 6.59% in August, helping to boost buyer activity. Inventory levels also reached a five-year high, with 1.55 million homes available, though prices remain elevated, with the median sales price hitting $415,200 — a 2.1% year-over-year increase, according to
.Fannie Mae and the Mortgage Bankers Association (MBA) have adjusted their forecasts to reflect the shifting landscape. Fannie Mae now predicts the 30-year fixed-rate mortgage will average 6.3% by year-end 2025 and 5.9% by late 2026, while the MBA expects rates to remain near 6.4% through 2026. Fannie Mae also revised its home sales outlook upward, forecasting 4.74 million total home sales in 2025 and 5.16 million in 2026. Meanwhile, JPMorgan strategists caution that the Fed may pause rate cuts after December 2025 to assess the economic impact of Trump's policies, adding uncertainty to the trajectory of mortgage rates, as reported in a Moomoo post.
Experts advise homebuyers and refinancers to act cautiously amid the volatile environment. With the Fed expected to cut rates again in November and December, mortgage rates could dip further, but risks remain. "Locking in rates now may be prudent for those with strong credit and clear timelines," said Darren Tooley, a senior loan officer. However, the potential for rate fluctuations—driven by inflation, labor market data, and geopolitical tensions—means that borrowers must stay informed. For now, the housing market appears to be in a transitional phase, balancing affordability gains with lingering uncertainties.
Comments
No comments yet