As rates for home loans hit their lowest level in over a year, housing market activity is responding. But upside from here may be limited unless rates take another big dip lower.
The average national rate for 30-year fixed-rate mortgages was 6.19% in the most recent week, Freddie Mac said on Oct. 23. That’s the fourth weekly decline in a row, and the lowest level for the most popular mortgage product since early October of 2024.
Lower rates are helpful for would-be buyers. An analysis from Redfin shows that the typical U.S. monthly payment is $2,556, barely any higher than it was a year ago. Compared to one month ago, when rates hovered around 6.4%, buyers have gained $9,500 in purchasing power, the brokerage reckons.
Buyers are jumping on the opportunity. Sales of previously-owned homes were 1.5% higher in September than August, the National Association of Realtors said Thursday, Oct. 23. Data on sales of newly-constructed homes is compiled by the Census Bureau, and remains on hold during the government shutdown.
For customers borrowing conventional 30-year fixed-rate mortgages, over 60% of the current locks are below 6%, said Bill Emerson, president of Rocket Companies – although in many cases those borrowers need to use points or other methods to get the rate that low.
Will mortgage rates at 13-month low rev up the housing market?
