Mortgage rates fall to their lowest average in more than a year

The 30-year, fixed-rate loan hit 6.19% as of Thursday

October 23, 2025

Mortgage rates sank further this week — hitting their lowest average since October 2024.

As of Thursday, the 30-year, fixed-rate mortgage averaged 6.19%, according to mortgage giant Freddie Mac. That's down from last week's 6.27% and the same week a year ago, when the average was 6.54%.

In fact, the last time the 30-year, fixed-rate average was lower than today was on Oct. 3 last year.

The 15-year, fixed-rate mortgage also decreased, averaging 5.44%. That's lower than the 5.52% average last week and the 5.71% average from this time last year.

Daily measures of mortgage rates, typically more volatile than averages, were holding steady as of the latest update Wednesday afternoon. The 30-year, fixed-rate mortgage was unchanged from the previous day at 6.17%, while the 15-year fixed-rate mortgage had inched 0.02 percentage points lower to 5.73%.

While it's a positive sign that rates are holding in a narrow range, the risk of forthcoming volatility remains, especially given the lack of official data on the economy. Without that data informing investors, the bond market, and in turn the mortgage market, has been left with little to work with, and thus, has been reacting to less important market movers, according to Matthew Graham, chief operating officer of Mortgage News Daily.

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"These market movers would normally be operating in the background — perhaps not even meriting discussion — but the dearth of data and the generally narrow range make their effects more noticeable," Graham explained. "It's good to remember that momentum comes and goes when it comes to rates and the bond market that drives them. Sometimes, a string of good luck is the only required catalyst for a token pull-back ... It may take some more convincing in the form of data or other events to motivate additional improvement."

Falling mortgage rates lift borrower demand and home sales

For now, though, some borrowers have been taking advantage of lower mortgage rates.

Data from the Mortgage Bankers Association showed that in the week ended Oct. 17, refinancing demand was up 81% from the same week in 2024. Similarly, purchase applications were 20% higher than a year earlier.

"The lowest mortgage rates in a month spurred an increase in refinance activity," Joel Kan, the association's vice president and deputy chief economist, said in a statement Wednesday. "Borrowers remain attentive to these opportunities to lower their monthly mortgage payment."

On the big picture, conditions in the mortgage market appear to be better than they were a year ago, despite the new challenges this fall has brought, including the federal government shutdown.

That's sending ripple effects through the market — in a good way. Thursday morning, the National Association of Realtors reported that its measure of pre-owned home sales increased 1.5% in September. The why? "Falling mortgage rates," according to the group's chief economist, Lawrence Yun. All told, existing home sales reached a seven-month high.

If that relationship continues — lower mortgage rates lifting home sales, combined with other factors such as increased inventory and home price appreciation — the housing market could get a long-awaited boost. The MBA, for one, expects that's where things are headed, updating its forecast and calling for an 8% increase in mortgages in 2026.