Americans grappling with high home borrowing rates received a glimmer of hope this week. The average 30-year fixed mortgage rate has decreased to 6.19% for the week ending October 23, down from 6.27% the previous week, according to data released by Freddie Mac on Thursday. This decline marks a significant moment for potential homebuyers who have been sidelined due to elevated borrowing costs.
As mortgage rates reach their lowest level in over a year and home prices soften in various major metropolitan areas, many sidelined homebuyers may finally feel encouraged to re-enter the market. Sam Khater, Freddie Mac’s chief economist, noted, “At the start of 2025, the 30-year fixed-rate mortgage surpassed 7%, while today it hovers nearly a full percentage point lower.” This shift in rates could potentially reignite interest in home purchases.
Amidst a government shutdown that has paused most economic data reporting, the notable drop in mortgage rates stands out as one of the few indicators still being released. Freddie Mac, which operates under federal conservatorship, continues to provide its weekly survey unaffected by the shutdown, ensuring that homebuyers stay informed about current rates.
As the market anticipates an October rate cut by the Federal Reserve as a “near certainty,” the outlook for home borrowing rates is more optimistic. Kara Ng, a senior economist at Zillow Home Loans, stated, “With signs of softer economic momentum and a deteriorating labor market, mortgage rates may drift slightly lower through 2026.” However, she also cautioned that Zillow expects the 30-year fixed rate to remain within the 6%–7% range observed in recent years.
While the Federal Reserve does not directly control mortgage rates, its actions can have a significant influence by affecting the 10-year Treasury yield. As lower mortgage rates and easing home prices improve housing affordability, many Americans may find it easier to break into homeownership.
Recent data points to a shift in the housing market dynamics. In September, the typical home sold for 1.4% below asking, according to a report from Redfin. This trend represents the largest September discount since 2019, prior to the pandemic-driven surge in home demand that caused prices to soar.
Potential homebuyers appear to be regaining some leverage in the market. Sales of existing homes in September surged at the fastest pace in seven months, according to a report from the National Association of Realtors (NAR) released on Thursday. “As anticipated, falling mortgage rates are lifting home sales,” remarked Lawrence Yun, NAR’s chief economist. He emphasized that improving housing affordability is also playing a crucial role in this increase in sales.
With mortgage rates trending downward and home prices stabilizing, now may be an opportune time for those looking to purchase a home. Whether you are a first-time buyer or seeking to upgrade, the current market conditions could work in your favor.
