Mortgage Rates Reach Lowest Average in Over a Year

Mortgage rates in October dropped to their lowest levels in over a year, offering some relief to the housing market. Freddie Mac reported that the average 30-year fixed-rate mortgage fell to 6.25%, while the 15-year rate dipped slightly to 5.49%. The 10-year Treasury yield, a key indicator for long-term borrowing, also declined to 4.09%. These decreases followed the Federal Reserve’s 25-basis-point rate cut on October 29, which markets had largely anticipated. The lower rates have led to a modest boost in housing activity, with increases in mortgage, refinance and purchase applications, as well as a rise in existing home sales to a seven-month high.

Despite this improvement, economic headwinds continue to challenge the housing sector. A softening job market, persistent inflation and ongoing policy uncertainty, including a pending Supreme Court case on tariffs and limited economic data due to the government shutdown, have created an unpredictable outlook. With these factors in play, the Federal Open Market Committee’s next move at its December meeting remains difficult to forecast.

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