Mortgage rates plunge to lowest level in over a year 

Mortgage rates have fallen to the lowest level in over a year following weeks of steady declines. But will the latest drop be enough to entice buyers who are looking for opportunities in the market's cooler seasons?

The 30-year fixed-rate averaged 6.19% as of Oct. 23 — down from 6.27% a week ago and the lowest level so far in 2025, according to the latest weekly survey from Freddie Mac. The last time rates were lower was on Oct. 3, 2024, when the 30-year rate fell to 6.12%, according to Freddie Mac data.

The 15-year fixed-rate mortgage has also trended downward since the start of month, averaging 5.44% this week.

Key inflation report due out soon

What happens next with mortgage rates will depend in part on Friday's inflation report. The September Consumer Price Index, which was delayed nine days by the federal government shutdown, will give the Federal Reserve some economic data to chew on before its meeting next week.

Other economic data that the Fed typically uses to shape its monetary policy decisions, such as the September jobs report, have not been released because of the shutdown.

Unless inflation comes in much hotter than expected, investors are counting on another short-term interest rate cut next week. But even with an October rate cut, additional declines in mortgage rates may be hard to come by — and that could mean that buyers have a short window of opportunity to make a move.

"The upcoming cut is already priced in, while uncertainty over a potential December move, stubborn budget deficits, and lingering inflation expectations continue to limit how far mortgage rates could fall," said Jake Krimmel, senior economist at Realtor.com.

Existing home sales up 4.1% YoY

Existing home sales got a much-needed boost before the shutdown began, rising 1.5% from August to September and 4.1% year-over-year, according to the National Association of Realtors. The seasonally adjusted annual rate of existing home sales bumped up to 4.06 million in September, which was still around the lowest level in the past three decades.

Meanwhile, home prices continue rising. According to NAR's Oct. 23 report, the median existing home sales price in September rose 2.1% from a year earlier to $415,200, marking the 27th consecutive month of year-over-year price increases.

While prices are still climbing, this is happening at a slower pace. Lower mortgage rates are giving buyers more wiggle room, but many home shoppers remain cautious as general economic concerns persist, according to Lisa Sturtevant, chief economist at Bright MLS.

"The push and pull of lower rates and rising economic uncertainty means that home sales activity is likely to remain steady through the fourth quarter, with total 2025 transactions ending only slightly above last year," Sturtevant said.

Uncertainty shows in pending sales, mortgage applications data

That push and pull is evident in the latest pending sales data. For the four weeks ending on Oct. 19, pending sales were down 0.7% year-over-year, according to Redfin's weekly report.

Mortgage applications also continue to drop off. For the week ending on Oct. 17, the seasonally adjusted total fell 0.3% compared to the week before, Mortgage Bankers Association data indicates, while purchase applications dropped 5% for the same period. Refinance applications were meanwhile up 4% week-over-week, and up 81% from a year ago.

While economic uncertainty may be pushing mortgage rates down, this factor is also causing unease among house hunters when it comes to making major purchases. This has in turn created an environment where there are over half a million more home sellers than buyers nationwide, Redfin economists estimate.