Homeowners and prospective home buyers in the United States have seen some relief: mortgage rates began to ease this week.

The average rate on a 30-year fixed-rate mortgage fell to 6.19% for the week ending October 23, down from 6.27% a week earlier, according to Freddie Mac, released on Thursday.

After years of weak market activity, pent-up home buyers may finally be ready to return: rates are now the lowest in more than a year, and housing prices are falling in many cities.

At the start of 2025, the 30-year fixed-rate mortgage topped 7%, and today it sits roughly a full percentage point lower.

– Sam Khater

Positive signals and expectations

Because of a government shutdown that halted most economic data, the sharp week-over-week drop in rates stands out as one of the few indicators still being published. Freddie Mac, despite being under federal conservatorship, continues to publish its weekly survey.

Mortgage rates are falling as markets expect a Federal Reserve rate cut in October as an almost certain expectation, said Kara Ng, senior economist Zillow Home Loans.

With signs of a moderating pace of economic activity and a worsening labor market, mortgage rates could ease slightly through 2026.

– Kara Ng

Although the Fed does not control mortgage rates, its actions can influence them through the yields on 10-year Treasury notes.

Lower rates and modest home prices could improve affordability for many Americans looking to become homeowners.

In September, the median sale price was about 1.4% below asking, according to Redfin data released last week. This was the largest September discount since 2019, when pandemic-era demand led to higher housing prices.

Home buyers are gaining more confidence – existing-home sales in September rose at the fastest pace in seven months, according to a separate National Association of Realtors report released on Thursday.

As expected, lower mortgage rates are boosting sales.

– Lawrence Yun

According to experts, lower rates are also supporting growth in home sales, and improved affordability is making the market more attractive to buyers.