Mortgage rates have resumed their downward trend, with averages falling for the second consecutive week.
As of Thursday, the 30-year, fixed-rate mortgage averaged 6.27%. That's lower than last week, and it's lower than the same week a year ago when the average was 6.44%, according to mortgage giant Freddie Mac.
The 15-year, fixed-rate mortgage exhibited a similar trend, averaging 5.52%, a decrease from last week and the comparable week in 2024.
On a daily basis, both the 30-year and 15-year, fixed-rate mortgages sank to weeks-long lows by Wednesday afternoon. The 30-year rate settled at 6.27%, while the 15-year rate was 5.82%, according to Mortgage News Daily. Daily measures of mortgages are typically more volatile than averages.
The downward trend in daily rates this week is a result of activity in the bond market, Matthew Graham, chief operating officer of Mortgage News Daily, said in a Wednesday post.
“Bottom line: mortgage lenders were getting caught up with yesterday's bond market rally,” he said.
Mortgage market experts have mixed expectations for the rest of the year
With just about two-and-a-half months left in the year, economists and insiders see a mixed future for the mortgage market.
In the short term, some expect the ongoing government shutdown to create some snarls in the market. That is in part due to a lack of federal economic data — those numbers play a big role in mortgage rates.
"Rates are going to rise and fall based on tariffs and things that come out of Washington," Melissa Cohn, regional vice president at William Raveis Mortgage, said in a statement. "At some point, the government shutdown will end, and we’ll go back to data-watching. Then, we’ll be able to react to that data.”
That also means it's more difficult to forecast where mortgage rates are headed — and that's pushing some borrowers out of the market, according to Bob Broeksmit, president and CEO of the Mortgage Bankers Association.
"Continued economic uncertainty, including the effects of the ongoing government shutdown, was likely behind the declines in purchase and refinance applications," he said in a statement, noting that the association's index measuring mortgage activity declined in the week ended Oct. 10.
Homebuyers could see more affordable market conditions
Bigger picture: There's cautious optimism.
On the one hand, there are those who think mortgage rates have bottomed out — at least for this year. Lisa Sturtevant, chief economist at Bright MLS, for example, thinks "the likely bet is that they are not going to fall much further."
"Buyers who think they want to wait for lower rates could find themselves facing higher prices but without an improvement in mortgage rates," she said in a statement on Wednesday.
"Perhaps perversely, the recent drop in rates could make it harder for some buyers, ratcheting up competition particularly in areas where inventory is still low," she added. "Price growth has slowed. However, if there is an increase in demand in the market, there is a possibility we could see price growth begin to accelerate again."
Others are more hopeful. Economists at Wells Fargo forecast on Thursday that home price growth will continue to slow through the end of the year and that the 30-year, fixed-rate mortgage will average 6.53% annually in 2025. By 2026, they expect that average to fall further to 6.23%.
Broeksmit said the MBA expects a similar trajectory.
"With rates below 6.5 percent and housing inventory on the rise, MBA expects affordability conditions to improve through the rest of 2025," he said.