US mortgage rates have dropped to their lowest levels in over a year, with the average 30-year fixed-rate mortgage falling to 6.19% for the week ending October 23, 2025.
This marks the third consecutive weekly decline, down from 6.27% the prior week and a significant pullback from the over 7% highs seen at the start of 2025. For context, rates averaged 6.54% a year ago, and this is the lowest point since early October 2024.
These figures come from Freddie Mac’s Primary Mortgage Market Survey and align with reports from Zillow and other lenders. Markets are pricing in a near-certain 25-basis-point rate cut at the Fed’s October 29-30 meeting, following September’s cut. This has pushed down the 10-year Treasury yield a key benchmark for mortgages to a 13-month low.
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Today’s CPI data showed a softer-than-expected reading—headline CPI at +0.3% month-over-month (vs. +0.4% expected) and core CPI at +0.2% (vs. +0.3%)—with year-over-year figures at 3.0% for both, below forecasts. This reduces pressure on rates to rise.
Weaker job market signals and slower business momentum despite strong PMIs are encouraging the Fed toward easing, indirectly benefiting mortgage borrowers. Applications jumped 10.8% last week, as more homeowners eye swapping high-rate loans many locked in above 7% for these levels.
Existing home sales rose 1.5% in September—the fastest pace since February—amid easing rates and softening prices homes sold 1.4% below asking in many metros. For a $400,000 loan, the monthly payment drops about $50 at 6.19% vs. 6.27%, but experts note rates would need to dip below 6% for widespread refinancing appeal since ~80% of mortgages are under 6%.
However, inventory remains tight, and prices aren’t falling dramatically yet. Another 25-basis-point Fed cut in December could nudge 30-year rates toward 6.3-6.4% by year-end.
Most analysts like the Mortgage Bankers Association, Fannie Mae see rates stabilizing around 6.4-6.5% through 2026, staying in the 6-7% range amid persistent inflation. Dramatic drops below 6% are unlikely without a major economic shift.
The US housing market is experiencing a period of moderation in home prices, with national year-over-year (YoY) growth slowing to its lowest levels since mid-2023.
While prices remain elevated—reflecting a cumulative 50% increase since 2019—recent data shows flat or slightly declining trends in many regions due to rising inventory, cooling demand from high mortgage rates now dipping below 6.2%, and softening economic pressures like tariffs and inflation.
A nationwide housing shortage of nearly 4 million units continues to provide underlying support, preventing a crash, but experts forecast modest growth of 1-3% through year-end.
Active listings hit a 4-year high in September (up 14% YoY), with 2+ months of supply in many metros—shifting leverage toward buyers and capping price upside. Homes are pending in ~17 days nationally down from 20+ earlier this year, but sales volume remains 20-30% below pre-pandemic norms due to affordability strains.
Trends vary sharply by geography, with the Northeast bucking the slowdown while the Sun Belt sees corrections. Strong fundamentals like job growth and low inventory drive gains; metros here lead the top 100 for appreciation.
South (e.g., Florida metros like Tampa, Austin TX)
7 of top 10 declining metros are in FL; overbuilding and insurance costs (up 45% in 5 years) fuel drops. West (e.g., California, Arizona) -1.4% (median $620,700). Sales up 1.4% MoM but prices softening; high escrow/tax burdens add 45% to costs vs. 5 years ago.
Midwest (e.g., Chicago); +2% to +4%
Mixed; steady but slower than Northeast peers. Negative growth is concentrated in overvalued Sun Belt areas, where investors now ~33% of buyers are pulling back amid higher carrying costs.
Mortgage rates at 1-year lows ~6.19% for 30-year fixed are encouraging more listings up 10-15% YoY but not yet sparking a buying frenzy—93% of Americans still cite costs as “too high.” Inflation at 3% YoY limits aggressive Fed cuts; tariffs could add upward pressure on construction costs, slowing new builds down 3% expected in 2025.
Elevated activity 1/3 of purchases sustains demand but favors cash-heavy deals, sidelining first-time buyers. Monthly payments for a median home exceed $2,500 up 50% since 2019; escrow/tax hikes exacerbate this, leading to longer market times up 10-20 days in softening areas.
Prices likely flat to +1.5% YoY, with inventory growth potentially +20% enabling more negotiation—mid-October (Oct 12-18) flagged as optimal buying window for softer prices and higher listings.
Gradual rebound to +3-6% growth as rates stabilize at 6-6.5%; NAR predicts 11% sales increase if inventory hits 4 months’ supply. No crash expected—experts like Zillow and Fannie Mae see sustained elevation due to shortages.
Focus on local comps; lock rates soon if buying. Sellers in cooling markets may need incentives. Overall, the market is thawing but remains buyer-cautious—lower rates could tip it toward balance by spring 2026.