Mortgage rates declined for the second week in a row, as the 10-year Treasury in recent days has flirted with falling below the 4% mark.
Last Thursday, the 10-year closed at 4.15%. As of 11 a.m. on Aug. 16, it was at 4.04%, helped by recent comments by Federal Reserve Chairman Jerome Powell regarding both short-term rate cuts and the balance sheet run-off.
The 30-year fixed-rate mortgage averaged 6.27% on Oct. 16 down by 3 basis points
At the same time, the 15-year FRM this week was at 5.52%, down 1 basis point from seven days earlier. For
Rates have held relatively steady in recent weeks, Freddie Mac Chief Economist Sam Khater noted.
The delayed data releases due to the shutdown is why this is the case, added Kara Ng, senior economist at Zillow Home Loans.
"Still, markets are using alternative data sources to gauge the economy's strength, the persistence of inflation, and the likely path of interest rates," Ng said in a Wednesday evening statement.
Zillow expects mortgage rates to drift lower the rest of this year because of softer economic momentum and a cooling labor market. But not much lower as it predicts rates will remain "confined within the 6%–7% range observed in recent years," Ng said. "Substantial downward pressure on rates is unlikely for the remainder of 2025, though modest relief could emerge as 2026 unfolds."
Compared with this same week one year ago, purchase application volume was up 20% and refinance rose 59%, the Mortgage Bankers Weekly Application Survey released on Wednesday found.
"Importantly, homeowners have noticed these consistently lower rates, driving an uptick in refinance activity," Khater said in the Freddie Mac press release. "Combined with increased housing inventory and slower house price growth, these rates also are creating a more favorable environment for those looking to buy a home."
Eric Hagen, an analyst with BTIG, thinks the "ongoing brinkmanship" from the shutdown is likely to "further catalyze lower mortgage rates" as it drives marginal demand for assets like Treasuries and government-sponsored enterprise mortgage-backed securities.
"More broadly, we think a protracted shutdown could delay the timeline for
Following the initial increase in the weeks after the September Fed meeting, mortgage rates have come back to one month low points, said Samir Dedhia, CEO of One Real Mortgage.
"This leveling out is being fueled by multiple forces. Expectations of future Fed rate cuts, combined with recent indicators of a cooling labor market and economy, are keeping long-term bond yields (and by extension, mortgage rates) in check," Dedhia said in a commentary after the Freddie Mac release. "Although inflation remains sticky, markets are pricing in the likelihood of at least one more Fed cut by year-end, helping to stabilize rate trends."
