Another Fed Rate Cut Pushes Mortgage Rates to Three-Year Lows. The Federal Reserve’s widely anticipated 25-basis-point rate cut This Week in Real Estate has lowered the Federal Funds interest rate to its lowest in three years. This marks the second consecutive reduction this Fall, with economists projecting a potential third cut in December. However, future rate adjustments are expected to face increased scrutiny amid a bifurcated market characterized by a softening job market and persistently elevated inflation. Mortgage rates continued their downward trajectory throughout October. The average rate for a 30-year fixed mortgage settled at 6.25%, reflecting a 10-basis point decline from September and a 17-basis point drop compared to October 2024. In the final week of the month, rates fell for the fourth consecutive week, averaging 6.17%. By comparison, the same rate stood at 6.72% one year ago. According to the National Association of Realtors, pending home sales in September remained unchanged from August, maintaining the second-strongest pace recorded this year. The Pending Home Sales Index held steady at 74.8, following a revised 4.2% increase in August, marking the highest level since March. Below are key events from the fourth week of October impacting our business:
FED DELIVERS ANOTHER 25-BPS RATE CUT. MORTGAGE LENDERS PREPARE TO SCALE UP. The Federal Reserve delivered a 25-basis-point cut to its benchmark interest rate on Wednesday, setting the target range at 3.75% to 4%. The move, which brings the federal funds rate to its lowest level in three years, comes amid a softening labor market and inflation pressures. Monetary policy watchers expect another cut in December, which – combined with a shift in the Fed’s balance-sheet strategy – could bring additional relief to mortgage rates, which are now at their lowest levels of the year. “With mortgage rates already hovering just above three-year lows, even a modest dip could further enhance affordability and stoke housing demand,” Sam Williamson, senior economist at First American said. Read the full story here.
LOWEST MORTGAGE RATES IN OVER A YEAR IN OCTOBER. Average mortgage rates in October trended downward to the lowest rates in over a year. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.25% in October, 10 basis points (bps) lower than September. Meanwhile, the 15-year rate declined just 1 bp to 5.49%. Both the 30-year and 15-year rates remain lower than a year ago, dropping by 17 bps and 11 bps year-over-year, respectively. The 10-year Treasury yield, a key benchmark for long-term borrowing, averaged 4.09% in October – a 5-basis point decrease from the previous month. Markets priced in rate cuts from the Fed at the start of the month, resulting in relatively unchanged rates following the announcement of a 25-bps cut to the federal funds rate on October 29th. Read the full story here.
PENDING HOME SALES IN U.S. REMAIN FLAT IN SEPTEMBER. Pending home sales held steady in September 2025, showing no change from August and slipping 0.9% from a year earlier, according to the National Association of Realtors’ latest Pending Home Sales Report. Regional trends were mixed. The Northeast and South saw modest gains in contract signings, while the Midwest and West registered declines. Pending sales in the Northeast rose 3.1% from August and were up 0.5% year over year. In the South, they climbed 1.1% from the prior month and 0.9% from September 2024. The Midwest posted a 3.4% monthly drop and a 1.5% annual decline, while the West fell 0.2% month over month and 5.3% year over year. “Contract signings matched the second-strongest pace of the year,” said Lawrence Yun, NAR’s chief economist. Yun noted that inventory levels have risen to a five-year high, providing more options for buyers and room for price negotiation. “Looking ahead, mortgage rates are trending toward three-year lows, which should further improve affordability,” he added. Read the full story here.
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