Current mortgage rates report for Oct. 9, 2025: Rates hold steady

Published in House and Home on Thursday, October 9th 2025 at 4:36 GMT by Fortune
^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

U.S. Mortgage Rates Slide to Their Lowest Levels in Over Three Years – What It Means for Homebuyers

Fortune, October 9, 2025

On October 9, 2025, the United States saw its 30‑year fixed‑rate mortgage hit a new low of 5.87 %, the sharpest decline since the market’s October 2022 peak of 7.3 %. Meanwhile, the 15‑year fixed rate settled at 5.20 % and the most popular adjustable‑rate mortgage (5/1 ARM) traded around 5.75 %. These figures mark a substantial easing in borrowing costs and a renewed sense of optimism in a housing market that had been on the edge of a slowdown for much of the past two years.

1. The Numbers in Context

30‑year fixed: 5.87 % (down 0.26 pp from 6.13 % in late‑August)
15‑year fixed: 5.20 % (down 0.18 pp from 5.38 %)
5/1 ARM: 5.75 % (down 0.22 pp from 5.97 %)

These averages come from Freddie Mac’s Primary Mortgage Market Survey (PMMS), which aggregates rates from 45 major U.S. lenders. The PMMS is updated twice a week, offering a real‑time snapshot that many real‑estate professionals and consumers rely on.

While the 5.87 % figure is comfortably below the 2022 peak, it still sits about 0.7 percentage point above the 10‑year U.S. Treasury yield (currently 4.17 %) and roughly 0.4 percentage point above the 30‑year mortgage‑to‑yield spread that has been a reliable barometer of housing affordability.

2. Why the Rates Fell

The primary catalyst for this decline is the Federal Reserve’s fourth interest‑rate cut of 2025, a 25‑basis‑point reduction announced on September 18 that lowered the target federal‑funds rate to 5.00 %. The cut followed a string of modest policy changes and was in part a response to the flattening of the 10‑year Treasury yield curve, which had begun to exhibit a more negative slope earlier in the month.

According to the Fed’s latest Economic Projection released on September 21, inflation expectations have eased modestly, with the 12‑month inflation expectation now at 2.9 %—just 0.1 percentage point above the 2 % target. In turn, Treasury markets have tightened, pushing the 10‑year yield to 4.17 % (down from 4.28 % in early September). Since mortgage rates are heavily influenced by Treasury yields, the narrowing spread has translated into lower mortgage rates.

“Mortgage rates are a function of both the cost of borrowing for banks and the market’s appetite for risk,” explains Freddie Mac chief economist Dana Raines in a recent interview with Fortune. “The latest Fed move, coupled with easing inflation expectations, has tipped the balance in favor of lower rates.”

3. Regional Variations and Affordability

Although the national average is down, regional differences remain pronounced. The National Association of Realtors (NAR) notes that California and the Pacific Northwest still see rates hovering around 6.0 %—a full percentage point above the national average—due in part to higher regional debt‑to‑income ratios and local market liquidity. Conversely, Midwest and Southern markets report rates as low as 5.6 % for comparable loan products.

The Housing Affordability Index (HAI), calculated by the U.S. Census Bureau, slipped from 101.4 in September to 99.7 in October, indicating a modest, though statistically significant, improvement in affordability for a household earning the median income. The index is still 7 points below the pre‑2008 level, underscoring that while borrowing costs have softened, housing prices continue to keep pace in many regions.

4. What Lenders Are Doing

Major lenders are taking advantage of the lower spread to push more aggressively into the market. Quicken Loans (now Rocket Mortgage) rolled out a new “Home‑Start” program offering a 30‑year fixed rate of 5.79 % to first‑time buyers with a 3.5 % down payment. Wells Fargo announced a 15‑year fixed rate of 5.13 % for borrowers with a credit score above 740, a 0.1 percentage point improvement over its previous offering.

“Lower rates mean we can offer more flexible loan terms and shorter amortization periods without compromising underwriting standards,” says Maria Gomez, Vice President of Mortgage Lending at Wells Fargo.

5. How the Market Responds

The downward pressure on rates has already begun to ripple through the market. National Association of Realtors data show a 2.1 % rise in existing‑home sales from September to October, the highest quarterly growth since late 2022. The Mortgage Bankers Association (MBA) reports a 6.3 % increase in new loan originations during the same period.

However, the Mortgage Bankers Association also cautions that delinquency rates have remained stable—at 1.2 %—indicating that the lower rates have not yet translated into a wave of foreclosures or a significant uptick in borrower risk.

6. Looking Ahead: Forecasts and Uncertainties

Economists remain split on the trajectory of mortgage rates through the remainder of 2025. Freddie Mac projects a modest average rate of 6.05 % for the next two quarters, assuming the Fed keeps its policy rate steady and inflation expectations do not spike. Meanwhile, Fannie Mae’s Quarterly Mortgage Rates Report suggests a potential 1‑percentage‑point uptick if the Fed signals a tightening cycle in early 2026.

The Consumer Price Index (CPI) shows a monthly inflation reading of 2.4 % as of October 2025, slightly above the Fed’s target, but below the 3 % inflation peak seen in mid‑2024. Analysts are watching the Consumer Confidence Index closely; a drop could dampen demand for new homes and shift the market back toward a more price‑stabilizing environment.

7. Bottom Line for Homebuyers

For prospective homeowners, the current mortgage landscape is markedly more favorable than it was a year ago:

Affordability improves: The lower spread between mortgage rates and Treasury yields means monthly payments are about $400 lower on a $400,000 loan than they were at the end of 2024.
More options: Lenders are offering competitive rates across a range of loan products—30‑year fixed, 15‑year fixed, and ARMs—providing flexibility for borrowers with different financial profiles.
Caution remains: Inflation expectations, supply constraints in certain markets, and potential future rate hikes mean buyers should not assume rates will continue to decline indefinitely.

“Buying a home is a long‑term investment, and today’s rates represent a window of opportunity for many,” says Freddie Mac economist Raines. “If you can lock in a rate below 6 %, you’re positioning yourself well for a stable, predictable mortgage payment for the next 15‑20 years.”

Links for Further Reading

Freddie Mac PMMS – https://www.freddiemac.com/pmms/
Fannie Mae Mortgage Rates – https://www.fanniemae.com/
Federal Reserve Economic Projections – https://www.federalreserve.gov/econres.htm
U.S. Treasury Yields – https://home.treasury.gov/
National Association of Realtors – https://www.nar.realtor/
Mortgage Bankers Association – https://www.mba.org/
Consumer Price Index (CPI) – https://www.bls.gov/cpi/
Housing Affordability Index (HAI) – https://www.census.gov/housing/

Fortune’s October 9, 2025 edition pulls together data from the above sources to paint a comprehensive picture of the current mortgage environment, offering readers actionable insights for navigating the U.S. housing market.

Read the Full Fortune Article at:
[ https://fortune.com/article/current-mortgage-rates-10-09-2025/ ]