Housing News

Mortgage Rates Fall for Third Straight Week

Mortgage interest rates fell for the third consecutive week, reaching their lowest level since September. This provides homebuyers another welcome break after interest rates climbed sharply earlier this fall.

The average rate on a 30-year fixed mortgage dropped to 7.18% for the week ending Nov. 5, down from 7.24% the previous week, according to Freddie Mac. A year ago, the average rate was 6.22%.

“Mortgage rates continued their downward trajectory this week, improving the environment for prospective homebuyers against a backdrop of strong economic growth,” Sam Khater, Freddie Mac’s chief economist, said in a statement.

The latest decline comes as homebuyers are also finding more opportunities to negotiate on price.

In October, nearly half of active home listings had undergone a price reduction, according to Realtor.com’s latest housing report. Pending home sales fell 10.5% from a year earlier, while new listings dropped 7.5%.

“With 43% of active listings having had a price reduction, buyers who can afford to participate are in a relatively strong position, facing less competition and more price cuts,” said Hannah Jones, senior economist at Realtor.com.

However, the improvement in borrowing costs has yet to translate into stronger mortgage demand.

Total mortgage applications declined 1.2% for the week ending Oct. 30, according to the Mortgage Bankers Association (MBA). Applications to purchase homes fell 2% from the previous week, while refinance applications edged up just 0.1%.

Purchase applications remained 19% below the same period a year earlier, while refinance applications were down 60%.

More homebuyers are also turning to adjustable-rate mortgages (ARMs) to reduce their initial borrowing costs. ARMs can offer lower initial monthly payments, but their interest rates and payments may change after the introductory fixed-rate period.

ARMs accounted for 11.4% of mortgage applications, their highest share since September 2025, according to the MBA.

The average rate on a 5/1 ARM fell to 6.29%, according to the MBA’s separate survey covering the week ending Oct. 30.

Meanwhile, the U.S. Federal Reserve held its benchmark interest rate steady at its October meeting.

Upcoming employment and inflation reports could influence the direction of mortgage rates in the weeks ahead, as investors weigh the possibility of another Fed rate increase in December.