Mortgage rates hit the 2025 low of 6.13% again on Tuesday, according to Mortgage News Daily. Housing market activity has been stronger in the latter half of 2025, buoyed by mortgage rates that are trending closer to 6%.
HousingWire’s Mortgage Rates Center, which tracks locked loans, shows that rates for 30-year conforming loans averaged 6.29% on Tuesday, the lowest figure since September 2024. Rates for Federal Housing Administration (FHA) loans also reached a 2025 low point of 6.13% this week, as did rates for 30-year jumbo loans (6.18%).
Samir Dedhia, CEO of One Real Mortgage, said in written commentary that “mortgage rates have now held relatively stable over the past several weeks, offering a welcomed sense of predictability in an otherwise data-driven market.”
That stability is largely being driven by the high likelihood of two more rate cuts this year by the Federal Reserve. The Federal Open Market Committee finishes its two-day October meeting on Wednesday, and the CME Group’s FedWatch tool shows that interest rate traders are placing 97% odds on a 25-basis-point cut.
Nearly 90% of traders believe there will be a second 25-bps cut in December, which would bring the federal funds rate to a range of 3.5% to 3.75%. Benchmark rates haven’t been that low since September 2022, when the Fed was deep into a series of rate hikes to combat 40-year-high inflation.
While inflation has come back to earth in the ensuing three years, it has started to rise again in recent months. The Consumer Price Index for September, released last week, posted a 3% annual gain. It was highest inflation rate for 2025 and the third straight month with an increase.
Yuval Golan, founder and CEO of real estate investment platform Waltz, said that Fed Chair Jerome Powell and other policymakers are keeping a close eye on inflation, and that near-term rate cuts are “not a guarantee.”
“One thing we do know is that Powell and others at the Fed have approached inflation with caution, trying to walk a tightrope of keeping the economy moving without overheating it,” Golan said. “It’s possible that they pause and reflect as the government figures out its budget and surfaces more economic reports.”
Sam Williamson, a senior economist at First American, also indicated that while the federal funds rate is on a path toward neutral territory, things could change if policymakers clash on the direction of inflation and employment.
“The government shutdown has limited access to fresh employment data, leaving policymakers with less visibility into the underlying health of the labor market. This lack of clarity could spark more disagreement among committee members, with some advocating for a pause and others pushing for a larger cut to hedge against downside risks,” Williamson said.
Housing market response
As rates move closer to the 6% mark — a threshold they haven’t crossed in more than three years — home sales and mortgage origination activity have warmed up slightly.
This week’s HousingWire Housing Market Tracker shows some volatility due to the Columbus Day holiday and the Amazon Web Services outage that may have skewed the data. HousingWire Lead Analyst Logan Mohtashami pointed out that while pending sales contracts sales picked up a bit over the summer, “we are working from extremely low sales levels” in 2024.
The National Association of Realtors reported last week that existing-home sales for September were at a seasonally adjusted annual rate of 4.06 million. That’s up 1.5% month over month and 4.1% year over year but still lower than most industry predictions going into 2025.
But market conditions and consumer activity have been on the upswing in the latter half of the year, according to Dedhia.
“Homeowners and buyers are responding to this environment,” he said. “Refinance activity has picked up noticeably, as more borrowers look to take advantage of these consistently lower rates. On the purchase side, we’re seeing increased housing inventory and slower home price growth, which (when paired with rate stability) is giving buyers a stronger sense of confidence and urgency.
“For anyone considering a move, the current landscape offers more options and more affordability than we’ve seen in months.”
Mortgage application activity continues to run above 2024 levels, according to data from the Mortgage Bankers Association (MBA). But the market is also heavily reliant on refi demand, which represents more than half of all applications and is up 81% from this time last year.
“Mortgage rates edged lower again last week, but that wasn’t enough to lift mortgage demand,” said Bob Broeksmit, the MBA’s president and CEO. “Continued economic uncertainty, including the effects of the ongoing government shutdown, was likely behind the declines in purchase and refinance applications.
“Looking ahead, with rates below 6.5% and housing inventory on the rise, MBA expects affordability conditions to improve through the rest of 2025.
