This week, Americans grappling with elevated home borrowing rates may have received some encouraging updates. The average 30-year fixed mortgage rate decreased to 6.19% for the week ending October 23, a decline from 6.27% the previous week, as per reports. Following an extended period of lackluster market performance, previously hesitant homebuyers appear poised to re-enter the market, as mortgage rates have reached their lowest point in over a year and home prices are experiencing a decline in numerous significant metropolitan regions. “At the start of 2025, the 30-year fixed-rate mortgage surpassed 7%, while today it hovers nearly a full percentage point lower,” stated Sam Khater.
The recent government shutdown has impeded the flow of economic data, making the notable one-week decline in mortgage rates a rare indicator that continues to be reported. Freddie Mac, while operating under federal conservatorship, remains unaffected by the shutdown and continues to release its weekly survey. Home borrowing rates are declining as markets perceive an October rate cut by the Federal Reserve as a “near certainty,” according to Kara Ng. “With indications of a decelerating economic landscape and a weakening labor market, mortgage rates could experience a modest decline through 2026,” Ng stated. “Zillow anticipates that the 30-year fixed rate will continue to stay within the 6%–7% range that has been prevalent in recent years.”
The Federal Reserve does not directly control mortgage rates; however, its policies can impact them by influencing the yield on the 10-year Treasury. Declining mortgage rates and easing home prices appear to be enhancing the housing affordability landscape for numerous Americans aspiring to enter the realm of homeownership. In September, the average home transacted at a price 1.4% lower than the asking price, as indicated by a report published last week. The largest September discount observed since 2019, prior to the pandemic-induced surge in demand that led to a significant increase in home prices.
Potential homebuyers may be beginning to reclaim some bargaining power — and a growing number are becoming aware of this shift. In September, the sales of existing homes experienced their most rapid increase in seven months, as indicated by a report. “As anticipated, falling mortgage rates are lifting home sales,” stated Lawrence Yun. “Enhancing housing affordability is likewise playing a role in the rise in sales.”