Mortgage Rates Decline to 6.19%, Boosting Home Sales

The average 30-year fixed mortgage rate declined to 6.19% for the week ending October 23, down from 6.27% the previous week, according to Freddie Mac data released Thursday. This marks the lowest level in over a year and nearly a full percentage point decrease from the start of 2025, when rates surpassed 7%.

"At the start of 2025, the 30-year fixed-rate mortgage surpassed 7%, while today it hovers nearly a full percentage point lower," said Sam Khater, Freddie Mac’s chief economist.

The National Association of Realtors (NAR) reported a 1.5% increase in existing-home sales in September, reaching a seasonally adjusted annual rate of 4.06 million. This represents a 4.1% rise compared to the same period last year. The median existing-home price for all housing types was $415,200, a 2.1% increase from one year ago.

"As anticipated, falling mortgage rates are lifting home sales," said Lawrence Yun, NAR’s chief economist. "Improving housing affordability is also contributing to the increase in sales."

Inventory levels have also improved, with total housing inventory at the end of September reaching 1.55 million units, up 1.3% from August and 14.0% from September 2024. This equates to a 4.6-month supply at the current sales pace.

"Inventory is matching a five-year high, though it remains below pre-COVID levels," Yun added. "Many homeowners are financially comfortable, resulting in very few distressed properties and forced sales. Home prices continue to rise in most parts of the country, further contributing to overall household wealth."

Regionally, existing-home sales increased in the Northeast, South, and West, while the Midwest experienced a decline. The Northeast saw a 2.1% increase, the South a 1.6% rise, and the West a 5.5% jump. The Midwest reported a 2.1% decrease in sales.

The average 30-year fixed-rate mortgage in September was 6.35%, down from 6.59% in August but up from 6.18% one year ago. With signs of softer economic momentum and a deteriorating labor market, mortgage rates may drift slightly lower through 2026. However, Zillow expects the 30-year fixed rate to remain confined within the 6%–7% range observed in recent years.

Lower mortgage rates and increased inventory are providing more options for prospective homebuyers, potentially improving housing affordability and encouraging more individuals to enter the market.