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Long-term mortgage rate falls to lowest level in more than a year at 6.19%. Here's why
Freddie Mac announced a decline in the average long-term mortgage rate for the third week in a row, giving cheer to prospective homeowners.
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There is some good news for Americans on the financial front as mortgage rates have gone down, government-backed company Freddie Mac announced on Thursday. According to CNN, the average 30-year fixed mortgage rate is 6.19% now for the week ending October 23, a decline from 6.27% last week.
This is the lowest that mortgage rates have been in over a year. House prices have also been moving downwards, meaning that homebuyers have found much-needed relief.
The decrease in mortgage rates this week follows a trend. The rate has gone down consecutively for three weeks now, as per ABC News. Last year, at this time, the rate was 6.54%. The current rate is the lowest since October 3, 2024, when it was 6.12%.
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What Freddie Mac said on mortgage rates
“At the start of 2025, the 30-year fixed-rate mortgage surpassed 7%, while today it hovers nearly a full percentage point lower,” Freddie Mac’s chief economist Sam Khater said in a statement.
Kara Ng, a senior economist at Zillow Home Loans, told CNN that home borrowing rates are falling due to the expectation of a rate cut from the Federal Reserve this month.
The combination of lower mortgage rates and lower house prices is seeing a growth in home purchases. According to a report by the National Association of Realtors, quoted by CNN, the sale of existing homes in September reached its highest level in seven months.
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Factors influencing mortgage rates
According to ABC News, several factors help determine the average long-term mortgage rate. The Federal Reserve’s moves on interest rates are among the most important ones. Also relevant is the mood of the bond market investors. The 10-year Treasury yield also plays a part in deciding the lending rates, which, in turn, affects the mortgage rate.
Mortgage rates also saw a decline in July this year as the Fed was preparing to cut its interest rate. Last month, officials announced that two more rate cuts could come this year. This has led to a further decline in the mortgage rate.
In January this year, the rate had reached 7%, but its decline since then has come as a boost for prospective homebuyers.
FAQs:
How much has the mortgage rate declined?
The average long-term mortgage rate has declined from 6.27% to 6.19%.
Which agency announces the mortgage rate?
Freddie Mac is a publicly traded and government-backed company.
When was the last time the mortgage rate was this low?
The current rate is the lowest since October 3, 2024.
