Mortgage rates fall for first time in 3 weeks

Mortgage rates fell for the first time in three weeks this week, mortgage buyer Freddie Mac said Thursday.

Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage decreased to 6.3% from last week’s reading of 6.34%. 

The average rate on a 30-year loan was 6.32% a year ago.

“Over the last few weeks, mortgage rates have settled in at their lowest level in about a year,”  said Sam Khater, Freddie Mac’s chief economist. “There is growing evidence that homebuyers are digesting these lower rates and gradually are willing to move forward with buying a home, which is boosting purchase activity.”

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The average rate on the 15-year fixed mortgage fell to 5.53% from last week’s reading of 5.55%.

One year ago, the rate on the 15-year fixed note averaged 5.41%.

Lower mortgage rates have pulled homebuyers back into the market, but many are still hesitant due to economic uncertainty, the affordability crisis plaguing the U.S. and the ongoing government shutdown.

“A government shutdown doesn’t just stop paychecks for some federal employees – it shakes the financial confidence of Americans,” said Redfin chief economist Daryl Fairweather. “People across the country are taking in the news and thinking, ‘we’ve faced inflation, tariffs, job losses, a volatile stock market, and now a government shutdown–what’s next?’ It’s understandable that some people are reconsidering buying a home or a car when the economy feels uncertain.” 

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A separate report from real estate company Redfin confirmed buyers remain hesitant, noting that pending home sales decreased 1.3% from a year ago in September, the biggest drop in five months.

“But buyers aren’t budging,” Redfin said. “The typical home that sells is taking 48 days to go under contract, a week longer than last year and the longest September span since 2019.”

Redfin said its agents in much of the country reported that prospective homeowners were waiting for mortgage rates to drop even further before wading back into the market.

“Some prospective buyers are also wary of making a big purchase while the economy is uncertain, with the government shutdown and recent weak jobs reports making some Americans insecure about their finances,” Redfin said.

Reuters contributed to this report.