Housing News
Mortgage Rates Drop to Their Lowest Point in More Than a Year
October 23, 2025
Mortgage interest rates continued their downward descent, hitting their lowest point in more than a year. Lower rates make it more affordable to purchase and own a home.
Rates averaged 6.19% for 30-year, fixed-rate loans in the week ending Oct. 23, according to Freddie Mac data. This was down from 6.27% in the previous week.
It was also a notable drop from this time last year when mortgage rates averaged 6.54%. And it’s a significant decline from early January, when rates briefly surpassed 7%.
“Today [interest rates] hover nearly a full percentage point lower,” said Freddie Mac Chief Economist Sam Khater in a statement.
Lower interest rates were welcome news for homebuyers frustrated by the challenging combination of high interest rates plus elevated high home prices. As rates come down, many buyers can stretch their budgets to look for a more expensive home or pay less each month for the same home.
The number of existing home sales rose 4.1% year-over-year in September, a rise that the National Association of Realtors attributed to lower mortgage rates.
Homeowners didn’t miss out on the action either. They rushed in to refinance their existing mortgages. Even small declines interest rates have the potentially to result in lower monthly housing payments.
Refinance applications were up 81% year-over-year in the week ending Oct. 17, according to the Mortgage Bankers Association.
“This dynamic has kept refinancings high, accounting for more than half of all mortgage activity for the sixth consecutive week,” said Khater.
Rates could continue to fall. The U.S. Federal Reserve is slated to meet next week and is expected to bring down its benchmark rate. While mortgage rates are separate, the two generally move in the same direction.
So, if the Fed signals more rate cuts are on the horizon this year and next, mortgage rates could fall.
“Rates have eased steadily…offering buyers and refinancers welcome savings and some breathing room as [housing] inventory climbs and buyers gain leverage,” Realtor.com Senior Economist Jake Krimmel wrote on the real estate listings site.
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