Average 30-year mortgage falls to lowest rate in more than a year

Mortgage Rates Fall to Lowest Level in Over a Year — What It Means for Buyers and Homeowners

Good news continues to roll in for the housing market: the average rate on a 30-year U.S. mortgage has fallen for the fourth week in a row, reaching its lowest level in more than a year. For both homebuyers and current homeowners, this drop brings fresh opportunities after a long stretch of elevated borrowing costs.

Rates Hit 6.17% — The Lowest Since October 2024

According to Freddie Mac, the average 30-year mortgage rate declined to 6.17%, down from 6.19% last week and well below the 6.72% average from one year ago. The last time the rate was lower was on October 3, 2024, when it hit 6.12%.

Shorter-term loans also saw improvement. The average rate on a 15-year fixed mortgage — a popular option for homeowners looking to refinance — slipped to 5.41%, down from 5.44% last week and from 5.99% a year ago.

Why Rates Are Falling

Mortgage rates are shaped by many economic forces, including:

• Federal Reserve policy decisions
  
  
• Investor expectations around inflation and economic growth
  
  
• Movements in the 10-year Treasury yield, which acts as a benchmark for most home loans
  
  

Rates have been above 6% since September 2022, when they began climbing from historic lows. The resulting affordability challenges led to a major slump in the housing market, with last year’s home sales hitting their lowest level in nearly three decades.

However, rates have been declining since July as the Federal Reserve signaled — and ultimately delivered — interest rate cuts to help support a cooling labor market. The Fed cut its key rate again this week, though Chair Jerome Powell cautioned that another cut in December is not guaranteed.

This week’s Fed commentary pushed the 10-year Treasury yield higher, rising back to 4.08% after spending much of the last two weeks below 4%. If inflation rises, especially amid ongoing tariff policies from the Trump administration, the Fed may also slow or halt further rate cuts — and Treasury yields (and mortgage rates) could climb again.

A Housing Market Hungry for Relief

The recent pullback in rates is already stimulating activity. Sales of previously owned homes, which have been sluggish for months, accelerated last month to their fastest pace since February. This shift suggests that improving borrowing conditions are beginning to draw buyers back into the market.

Refinancing is also making a comeback. Many homeowners who purchased during the past two years — when rates sat above 6% — are seizing the chance to lock in a lower payment. Mortgage applications (including both purchase and refinance loans) surged 7.1% last week, according to the Mortgage Bankers Association.

What This Means for You

Whether you’re planning to buy, sell, or refinance, today’s environment offers meaningful advantages:

• Buyers gain more purchasing power as rates decline.
  
  
• Sellers may benefit from renewed buyer demand.
  
  
• Homeowners can explore refinancing opportunities that were out of reach earlier this year.
  
  

While future rate movements remain uncertain — especially as inflation, Treasury yields, and Fed decisions continue to interact — right now the trend is working in consumers' favor.

If you’re considering your next move in this shifting market, now is a great time to explore your options.