{"id":218484,"date":"2025-10-17T00:01:12","date_gmt":"2025-10-17T00:01:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/218484\/"},"modified":"2025-10-17T00:01:12","modified_gmt":"2025-10-17T00:01:12","slug":"when-will-mortgage-rates-go-down-rates-remain-relatively-flat","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/218484\/","title":{"rendered":"When will mortgage rates go down? Rates remain relatively flat."},"content":{"rendered":"\n

Mortgage rates have been fluctuating over the past month, but all the changes have been small. According to Freddie Mac, the 30-year fixed mortgage rate dropped by three basis points this week \u2014 but it\u2019s still one basis point higher than this time last month. Stagnant rates may leave you wondering: Is it a good time to buy a house<\/a>?<\/p>\n

In this article:<\/p>\n

As of Oct. 16, Freddie Mac reported that the average 30-year fixed-rate mortgage rate had fallen by three basis points to 6.27%. The 30-year rate is now 17 basis points lower than it was this time last year. In mid-October 2024, mortgage rates averaged 6.44%.<\/p>\n

This week\u2019s 15-year fixed mortgage rate is down just one basis point to 5.52%. However, it is 11 basis points lower than this time last year.<\/p>\n

In situations like these, it pays to look at the numbers. Here\u2019s the Freddie Mac data on mortgage rates for the past 52 weeks as of Oct. 16, 2025:<\/p>\n

If you just go by the numbers, rates on 30-year and 15-year fixed-rate mortgages<\/a> are between the highs and lows of the last 12 months, but are definitely leaning toward the lower end\u2014 especially the 30-year rate, which is just one basis point higher than its 52-week low.<\/p>\n

So, yes, mortgage rates are dropping when you look at the larger picture. But for the past month or so, they\u2019ve hardly moved.<\/p>\n

Now that the Federal Reserve<\/a> has lowered the fed funds rate, why have mortgage rates ticked up? This is actually very similar to what happened last year when the Fed slashed its rate for the first time.<\/p>\n

When the Fed \u2014 the common nickname for the Federal Open Market Committee (FOMC)<\/a> \u2014 held its September 2025 meeting, it voted to lower the federal funds rate by 25 basis points. The central bank had cut its rate three times at the end of 2024, but this was the first slash of 2025.<\/p>\n

That federal funds rate<\/a> tends to directly influence rates on shorter-term lending. While mortgage rates aren\u2019t directly based on the fed funds rate, they typically mirror fed fund rate trends. So, if the fed funds rate goes down, mortgage rates will likely follow. The inverse is also true.<\/p>\n

When people anticipate a fed funds rate cut, mortgage rates usually fall in the weeks leading up to the meeting. However, home loan rates don\u2019t necessarily continue to decrease after a fed funds rate cut.<\/p>\n

In 2024, mortgage rates plummeted throughout August and early September as people expected the Fed to lower its rate at the bank\u2019s September meeting. But mortgage rates stopped decreasing significantly after this meeting \u2014 and after the two additional rate cuts later that year.<\/p>\n

The same seems to have happened in 2025. Mortgage rates gradually declined in the weeks leading up to the September meeting when people expected the Fed to lower its rate, and even though the fed funds rate did go down, mortgage rates bounced back up. Now, a few weeks later, they\u2019ve settled down.<\/p>\n

While short-term lending rates closely follow the fed funds rate, mortgage rates more closely follow the 10-year Treasury yield<\/a>. As of Oct. 14, the 10-year Treasury yield sat at 4.03% \u2014 unchanged from a year prior.<\/p>\n

You\u2019re probably wondering why today\u2019s mortgage rates aren\u2019t in the 4% range<\/a>, right?<\/p>\n

To determine current mortgage rates<\/a>, lenders add a \u201cspread\u201d to the 10-year Treasury yield. The spread is simply the difference between the rates consumers pay and the rate on the 10-year Treasury. Without getting too much into the weeds, charging a spread helps mortgage lenders cover costs associated with making loans to the public and the risk of providing such loans.<\/p>\n

For example, the current average 30-year fixed mortgage rate is 6.27%, and the 10-year Treasury yield is 4.03% \u2014 a spread of 2.24%.<\/p>\n

In short, no. You probably shouldn\u2019t wait to buy a home until mortgage rates drop more drastically. Mortgage rates are just one part of the affordability equation. You also have to consider home prices, a factor of housing supply and demand.<\/p>\n

The current housing market is in a crunch. To put it simply, buyers outnumber homes for sale, especially homes in price ranges accessible to the first-time home buyer<\/a>. When supply and demand are out of balance like this, home prices tend to remain high since sellers know they\u2019ll have multiple buyers interested.<\/p>\n

According to data from the Federal Reserve Bank of St. Louis, the median sale price of single-family homes has generally trended upward since Q1 of 2009. At that time, the median sale price was $208,400. The median price had risen to $410,800 by Q2 2025.<\/p>\n

While recession<\/a> speculation has recently increased, prospective buyers likely won\u2019t see much relief in a true recession. If interest rates drop like they tend to do in recessions, that will increase the number of people looking to buy and lock in a lower interest rate. That drives up demand for the already limited supply of homes.<\/p>\n

To truly save, buyers need both interest rates and home prices to drop<\/a>. Mortgage rates are inching down this month, and housing prices are stagnant or even lowering in certain parts of the country. Still, rates are higher than they were this time last year, and prices are still increasing in many cities. Situations may be improving for buyers, but there\u2019s a lot of work to be done.<\/p>\n

If you crave the comforts of homeownership, the best strategy in today\u2019s market may be to buy what you can afford. Whether that means a smaller house or a condo instead of a single-family home, owning something puts you in a position to start building equity.<\/p>\n

Yes, shopping for the best mortgage lenders<\/a> with low rates and fees is crucial when getting a mortgage. But to help you find your ideal home that balances affordability and desirability, it pays to adopt a curious mindset and consider lesser-discussed financial tools.<\/p>\n

There\u2019s no better time to learn more about your local real estate market than today. By adopting a sense of curiosity, you could discover that your city has more to offer housing-wise than you previously thought.<\/p>\n

You may want to take weekend excursions to lesser-known neighborhoods and suburban developments beyond the city limits. You never know what you\u2019ll find that could expand your idea of what \u201chome\u201d looks like \u2014 including new developments, school districts, and types of homes<\/a>.<\/p>\n

If you\u2019re looking to spend less on a home in today\u2019s mortgage market, a house needing a bit of TLC could help you do just that. Loans like the FHA 203(k) mortgage<\/a> can roll your purchase and renovation costs into one convenient loan. When you qualify and have an accepted offer, your lender immediately funds the home\u2019s purchase price and puts the cost of renovations into an escrow account. As you make repairs, funds get dispersed.<\/p>\n

How would it feel to have a longer commute yet come home to a house you love? Master-planned communities tend to crop up outside major cities, offering amenities like parks, shopping, and top-notch schools \u2014 all in exchange for a longer commute. These areas could look a lot more palatable if they offer commuting options like park-and-ride or commuter rail. Dare to consider parking the car and taking public transit if it could get you into the home of your dreams.<\/p>\n

While shared walls, floors, and ceilings might not immediately scream \u201cdream home,\u201d they could help you find an affordable home in a terrific area. Condominiums<\/a> come in various shapes and sizes, from apartment-style flats to townhomes. Depending on the area, you might even score a small backyard. However, be sure to consider HOA fees when calculating your monthly payment.<\/p>\n

While the monthly payment on a 15-year mortgage will be higher than the typical 30-year, these loans have plenty of upsides. Not only will you pay off your home on a speedier timeline, but you\u2019ll also likely score a lower interest rate and save a ton on interest over the life of your loan.<\/p>\n

To make today\u2019s mortgage rates more palatable, look into rate buydown<\/a> options. An interest rate buydown lets you pay cash up front in exchange for a reduced interest rate on your mortgage. Buydowns can be permanent or temporary (for your loan’s first one to three years, for example). Even a few years of lower rate relief can make today\u2019s home prices more affordable.<\/p>\n

Expert opinions differ on what mortgage rates will do over the next year or so. The Mortgage Bankers Association (MBA) predicted in its September forecast that the 30-year fixed rate would hit 6.5% by the end of 2025 and 6.4% in Q4 2026. However, the September Fannie Mae Housing Forecast was more optimistic. Fannie Mae predicted that rates will go down to 5.9% by the end of next year. Both forecasts put mortgage rates at above 6% throughout 2025<\/a>, though.<\/p>\n

Compared to historical mortgage rates<\/a>, 7% isn\u2019t considered a high rate. While it might be high compared to pandemic-era rates that were sub-3%, it\u2019s on par with mortgage rates in the 1990s, and considerably lower than the double-digit rates seen in the late 1970s and early 1980s.<\/p>\n

It\u2019s not impossible to get a 3% interest rate, but doing so requires the perfect set of circumstances. You\u2019d need to find a homeowner with an assumable mortgage<\/a> \u2014 one that can be passed to a new owner at the same interest rate as the original loan. Assumable mortgages are generally government-backed loans from agencies like the VA, FHA, or USDA.<\/p>\n

Laura Grace Tarpley<\/a> edited this article.<\/p>\n","protected":false},"excerpt":{"rendered":"Mortgage rates have been fluctuating over the past month, but all the changes have been small. According to…\n","protected":false},"author":2,"featured_media":218485,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[97205,45,49,48,46,105384,81090,32174,9316,105383,105382,17757],"class_list":{"0":"post-218484","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-basis-point","9":"tag-business","10":"tag-ca","11":"tag-canada","12":"tag-economy","13":"tag-fed-fund-rate","14":"tag-fed-funds-rate","15":"tag-freddie-mac","16":"tag-interest-rates","17":"tag-mortgage-lenders","18":"tag-mortgage-rate","19":"tag-mortgage-rates"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/218484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=218484"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/218484\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/218485"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=218484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=218484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=218484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}