Mortgage rates at their lowest levels of 2025

Mortgage interest rates have fallen to their lowest point of the year after a downward trend for the past several months. 

Analysts at realtor.com suspect the drop is due to a combination of factors. The current U.S. government shutdown has limited the data lenders have to work with. Treasury yields, which have some influence on borrowing costs, have dropped some as well. And the Federal Reserve announced a rate cut in mid-September. 

Is now the right time for you to consider applying for a home loan or mortgage refinance?  

Apply now to talk with a loan specialist about how recent rate reductions could help get you into your dream home! 

According to data from Freddie Mac, the 30-year fixed-rate mortgage averaged 6.19% as of Oct. 23.* That’s down from 6.27% one week ago and down from 6.46% one year ago. 

“Mortgage rates continued to trend down this week, hitting their lowest level in over a year,” Sam Khater, Freddie Mac’s Chief Economist, said in a news release. “At the start of 2025, the 30-year fixed-rate mortgage surpassed 7%, while today it hovers nearly a full percentage point lower. This dynamic has kept refinancings high, accounting for more than half of all mortgage activity for the sixth consecutive week.” 

Mortgage interest rates have trended downward since about the end of May, as shown in a chart published by Freddie Mac.  

In September, the influential Federal Reserve announced plans for its first rate reduction of 2025. Combined with that quarter-point cut and limited data coming from the U.S. government during the current shutdown, rates have slid significantly lower, especially in the past week. 

A report this week from the National Association of Realtors® shows an increase in home sales in three of four U.S. housing markets that it tracks. The report also suggested that the inventory of homes for sale is at a five-year high. 

The months of spring and summer traditionally make up the bulk of the annual homebuying season. We’re past that part of the year now, so home sales could pick up some as mortgage interest rates decline and we head into fall and winter.  

Winter months are generally a slower time for home sales. Prices will often trend downward as sellers look to price their properties for off-market-peak purchases. 

Given the drop in rates, the uptick in inventory and the general downward trajectory of home prices during this time of year, it could be a good time to shop around for a home. 

If you’re a homeowner with a mortgage interest rate that’s higher than current rates, it might be a good time to consider refinancing your home. 

Refinancing can save you a significant amount of money over the life of your loan with even a small change in rates.  

It can also be a good time to consider a shorter loan term, such as refinancing a 30-year loan into a 15-year mortgage. A shorter term could mean somewhat higher monthly payments, but it still could save you a good deal of money in interest payments and allow you to budget for other priorities.

Mortgage rates can only do one of three things: go up, go down or stay where they are. If the current trend continues, and if the Federal Reserve cuts rates again this year, there’s a good chance rates will decline further in the favor of potential homebuyers. 

Rates have come down a good deal in the past several months. Even if they do tick back up some, it might still be a good time to consider a purchase or refinance, especially given the timing of the season when prices might also come down. 

Because of the market forces in play, particularly the U.S. government shutdown and the expectation that the Federal Reserve might cut rates again before the end of the year, it might be logical to expect rates to continue downward.  

If rates do follow the trend and go lower, you could anticipate more homes to come onto the market as sellers look to find buyers qualifying for mortgages with new lower rates.  

And if more homes do come onto the market, the competition among sellers particularly in higher-value markets could bring down prices to levels not seen in some years.  

Buyers considering entering the housing market now or soon should certainly keep an eye on rates and consider pre-approval so they can act quickly when rates are favorable and that dream home comes up for sale. 

Rates at current levels are still considerably lower than they have been at any point in 2025. While there is no perfect time to buy a home, a drop in rates like the recent downward trend could be enough to encourage previously hesitant buyers to jump in and enter the housing market.  

Mortgage pre-approval is a key first step toward purchasing that home you’ve always wanted.  

Pre-approval will allow you to see what your rate could be and learn how much you will qualify to borrow so you can shop with the confidence that you are looking at homes you can afford. It also tells home sellers and real estate agents that you are a serious buyer and are ready to act on your purchase when you find it. 

Apply now to get started! A Loan Officer will walk you through the process and work to get you into that dream home. 

_{National averages rates are provided from Freddie Mac for informational use only as of Oct. 23, 2025, and are not advertised rates from Rate.} 

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