Mortgage rates drop to lowest level in over a year as buyers regain leverage

Mortgage rates dropped this week to their lowest level in more than a year, mortgage buyer Freddie Mac said Thursday.

Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage decreased to 6.19% from last week’s reading of 6.27%. 

The average rate on a 30-year loan was 6.54% a year ago.

“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. “This dynamic has kept refinancings high, accounting for more than half of all mortgage activity for the sixth consecutive week.”

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The average rate on the 15-year fixed mortgage fell to 5.44% from last week’s reading of 5.52%.

One year ago, the rate on the 15-year fixed note averaged 5.71%.

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This week’s shift confirms market expectations that mortgage rates would ease ahead of the Fed’s expected rate cut next week. The drop also comes amid falling Treasury yields and ongoing uncertainty from the government shutdown, according to Realtor.com Senior Economist Jake Krimmel.

“But further declines may be harder to come by,” Krimmel said. “The upcoming cut is already priced in, while uncertainty over a potential December move, stubborn budget deficits and lingering inflation expectations continue to limit how far mortgage rates could fall.”

For the housing market, the shift gives buyers a window of opportunity. 

“Rates have eased steadily throughout the ‘best time to buy’ season, offering buyers and refinancers welcome savings and some breathing room as inventory climbs and buyers gain leverage,” Krimmel said. “While affordability remains a challenge, borrowers still have meaningful control over the rate they lock in through credit, loan type and down payment decisions.”