📈 Mortgage Rates Hit the Lowest Level of 2025
The average 30-year fixed mortgage rate is clocking in this morning at 6.164%, according to the Optimal Blue Mortgage Market Index, the lowest level we’ve seen all year. The previous low was 6.17% back in September, just before the Federal Reserve’s rate cut.
We love to see it.
Last year, rates never returned to this range after the initial post-Fed drop in September 2024, so today’s numbers are a meaningful milestone for buyers and refinancers alike.
🔮 Expert Forecasts: What Comes Next for Rates?
At the Mortgage Bankers Association’s annual meeting in Las Vegas, Chief Economist Mike Frantantoni predicted that mortgage rates will stay between 6.0% and 6.5% through 2028, with the 10-year Treasury remaining above 4%. (It’s currently sitting at 3.99%.)
Meanwhile, MBS Highway, a mortgage bond watch service, forecasts a slightly more optimistic range of 5.75% to 6.0% , still a healthy improvement from where we started the year.
Even Frantantoni’s conservative forecast includes a bump in home sales, from 4.8 million to 5 million next year, signaling steady buyer demand despite elevated rates.
🏠 Why This Matters for Buyers and Homeowners
Here’s the reality: no one can predict the future. We’ve seen how quickly market conditions can shift — remember how few people saw COVID coming?
Even with potential volatility ahead, both MBS Highway and the MBA agree that the Fed is likely to cut rates twice more this year and at least once again in 2026.
Even the most cautious outlook puts the low end around 5.75%, just 0.375% below today’s rate. That’s a reminder that the window we’re in now may already represent the best affordability we’ve seen in years.
💡 Key takeaway: Whether you’re buying or refinancing, now is as good a time as we’ve seen in the last 3–5 years.
🧠 What’s Going on in Washington?
Kevin Hassett, one of the top contenders for the next Fed Chair and the current Director of the National Economic Council, told CNBC this morning that he expects the government shutdown to end this week.
If not, we could see disruptions in air travel and logistics, especially since air traffic controllers are currently working without pay. Fingers crossed that resolution comes quickly.
📉 All Eyes on the CPI Inflation Report
This Friday’s Consumer Price Index (CPI) report for September could be the next major market mover.
With other data delayed due to the shutdown, CPI will carry extra weight, and a favorable reading could nudge mortgage rates even lower. Inflation data always influences the bond market, and in turn, mortgage pricing.
📰 Market Snapshot: Week of October 13, 2025
🏗️ Home Builder Confidence Hits a 6-Month High
According to the National Association of Home Builders, builder confidence jumped five points to 37 in October, the highest since April.
All three components of the index improved:
- Buyer traffic and current sales each rose four points
- Future sales expectations climbed above 50 for the first time since January
“Easing mortgage rates are helping affordability,” said the NAHB’s chief economist. “This is a positive signal heading into 2026.”
📘 Beige Book Takes the Spotlight
The Fed’s Beige Book, its regional economic summary, showed little overall change across the U.S.:
- 3 districts reported slight growth
- 5 were steady
- 4 reported softening
Consumer spending was weaker among middle- and lower-income households, while some companies have begun trimming staff in response to slower demand.
With the shutdown delaying major reports like jobs and inflation, the Beige Book could carry unusual influence when the Fed meets again on October 29.
Markets still expect another quarter-point rate cut, even though inflation remains above the 2% target.
💬 Quick Refresher: What Is the Fed Funds Rate?
The Fed Funds Rate is the short-term rate banks charge each other for overnight loans.
While it doesn’t directly set mortgage rates, it heavily influences them through bond yields and investor sentiment.
🔍 What to Watch This Week
- Thursday: September Existing Home Sales (NAR)
- Friday: September CPI Report (expected despite shutdown)
👆 Bottom Line for Real Estate Professionals
- Builder sentiment is improving
- Mortgage rates are at their lowest point of 2025
- Affordability is improving
- Fed cuts are likely still ahead
Momentum is quietly building. Whether it’s for buyers ready to act or homeowners considering a refinance, this is the kind of market that rewards early movers.
🏡 From The Mortgage Gallery
We’re here to help clients make smart, confident mortgage decisions—through any market. If you’d like a personalized rate quote or refinance review, reach out to our team today.
📞 Call us at 865-263-6727
📧 TMG@TheMortgageGallery.com