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Mortgage Rates Over the Past Three Weeks: What’s Changed

orange calculator beside the black smartphone

Over roughly the last three weeks, U.S. mortgage rates have edged downward, reaching their lowest levels in about a year.

According to Freddie Mac’s most recent data, the average 30-year fixed mortgage rate fell to 6.30 % from 6.34 %.

heap of banknotes beside hourglass

This decline is modest, but meaningful in the current interest rate environment — especially given how tightly rates have been trading lately.

In prior weeks, there was also a rebound in rates: for example, the week ending October 2 saw average rates rise from 6.30 % to 6.34 %, as Treasury yields ticked upward.

But the recent movement has tilted downward again, amid growing caution about economic strength.

Recent Months to Today

  • As of October 14, 2025, the average 30-year fixed mortgage rate stood at 6.30 % — down from 6.34 % the prior week.
  • Over the past several weeks, rates have settled in their lowest band in roughly a year.
  • Earlier in 2025, rates were higher — in many places above 6.8 % or even close to 7.0 % for conforming loans, depending on timing and market conditions.
  • Looking back further, we see that since 1971, the long-term average 30-year fixed rate is about 7.71 % (through 2025)
  • In other words, current rates are still below that historical average, though far from the ultra-low rates seen in the 2010s and early 2020s.

Why Rates Are Moving: Key Drivers

To understand why mortgage rates have shifted, it helps to zoom out and see the levers that push long-term borrowing costs:

1. Treasury yields & the bond market

roll of american dollar banknotes tightened with band

Mortgage rates are closely linked to longer-term Treasury yields (especially the 10-year). When investors buy Treasurys, yields fall; when they sell, yields rise. Mortgage lenders price based on these benchmarks.

In recent weeks, Treasury yields have shown some softness, reflecting investor appetite for safer assets amid economic uncertainty. That downward pressure on yields helps bring mortgage rates lower.

2. Economic data & inflation

Every inflation report, employment release, and GDP update can swing expectations about future interest rates. If inflation shows signs of sticking higher, markets will demand higher yields (and mortgage rates) to compensate.

Conversely, weak jobs or growth data can boost expectations of rate cuts and push long yields lower.

In recent weeks, signs of softening in labor markets have grown more pronounced, which has helped ease rate pressures.

3. Federal Reserve policy expectations

The Fed doesn’t set mortgage rates directly—but its policy decisions and forward guidance are central to rate expectations. Markets are watching how many cuts the Fed will enact in 2025 (and how fast) and how strongly it will resist inflation.

Recently, the Fed has signaled caution, acknowledging that inflation risks remain. But weaker labor data may give it more room to ease.

4. Supply, demand & housing market sentiment

Mortgage rate movement also reacts to credit demand, lender competition, and overall confidence in the housing market. As rates dip, some borrowers respond quickly with refinance or purchase activity. That can feed back into pricing dynamics.

yellow flowers in bloom

In fact, even small rate reductions lately have triggered increases in refinancing inquiries.

Also, broader uncertainties — such as the current U.S. government shutdown — create additional caution in markets, which can tilt toward lower yields (and lower mortgage rates).

What to Watch Next: Forward Outlook & Risks

Given where we are, here’s what I see as the main potential paths forward — and what borrowers should watch for.

Base Case: Modest Further Decline or Plateau

Most forecasts expect mortgage rates to stay where they are or possibly drift modestly lower through late 2025. For example, Fannie Mae recently revised its year-end expectation to 6.4 %, and 2026 to ~6.0 %.

  • Other analysts believe rates will more or less stay in the 6.2 %–6.6 % range through year-end, depending on economic data.
  • If inflation continues to ease and labor markets soften, bond yields could fall further, dragging mortgage rates down with them.

Upside Risk: Rates Could Rise

  • If inflation surprises to the upside, markets could push yields (and thus mortgage rates) higher.
  • Strong economic data — especially in jobs, consumer spending, or corporate profits — could make the Fed more reluctant to cut or even force it to reconsider policy tightening, which would ripple through longer-term yields.
  • Global or fiscal surprises (e.g. government shutdowns, debt ceiling worries, geopolitical events) can trigger volatility in bond markets, pushing rates upward.

Final Takeaways for Borrowers & Homebuyers

It’s not a dramatic rate cut that is in play — the recent moves are incremental.  But every basis point matters when you’re financing a large amount.

a person giving a bundle of keys to another person

If you’re in the market now and your numbers make sense, don’t wait on “perfect” rates. Locking something in is often better than trying to time the bottom.

Also, do keep a close eye on inflation numbers, payrolls/unemployment data, and Fed communications. These will be the levers moving rates in the coming weeks.

Finally, for clients who are refinancing or planning purchases in 2025, building in some “wiggle room” (i.e. rate buffers) is prudent given the potential volatility.

Reach out to me today to discuss your current situation and to make sure you are not missing out.  I’d be happy work with you and explore options.

If it’s easier, you can schedule a call with me here…

The Lending Coach

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

Waiting to Purchase a Home Can Actually Be More Costly

Alarm clock

Many prospective homebuyers wait to purchase a home in hopes of finding a better deal, saving for a larger down payment, or waiting for lower interest rates.

$20 bills

While these reasons might initially seem financially sensible, waiting to buy a home can often lead to higher costs in the long run.

Rising home prices, ever-changing mortgage rates, and missed opportunities for equity growth can actually make delaying a home purchase more expensive than acting sooner.

Rising Home Prices

One of the most significant reasons waiting to buy can be costly is the continuous rise in home prices.

Pretty blue house

Real estate markets tend to appreciate over time, meaning that a home that costs $300,000 today could be significantly more expensive in just a few years.

By postponing a purchase, buyers risk paying tens of thousands of dollars more for the same property in the future, making homeownership less affordable.

Missing Out on Equity Growth

Owning a home allows buyers to build equity as property values increase and mortgage balances decrease over time.

When buyers delay purchasing, they miss out on the opportunity to build wealth through home appreciation.

Homeownership acts as a forced savings plan, and the longer one owns a home, the more equity they accumulate. Waiting means missing years of potential financial growth.

Renting Costs Add Up

Calculator

Many people choose to rent while waiting to buy, but rent payments do not build equity or provide long-term financial benefits.

Additionally, rental prices tend to rise over time, often making renting more expensive than a fixed mortgage payment.

The money spent on rent could be used to pay down a mortgage instead, helping buyers secure their financial future.

Limited Housing Inventory

As demand for homes increases, inventory often becomes more competitive, making it harder to find an affordable home.

If a buyer waits too long, they may find themselves in a market where fewer homes are available within their budget.

This competition can drive up prices even further, making it more challenging to purchase a home at a reasonable cost.  Find out more on that here…

In Conclusion

While it may seem like waiting to buy a home provides financial advantages, the reality is that delaying can lead to higher costs due to rising home prices and lost equity opportunities.

Renting also provides no return on investment, while housing market competition can make future purchases more difficult.

For many buyers, acting sooner rather than later can be the most financially beneficial decision.  Do reach out to me so we can put a plan together that will help you purchase a home in the very near future!

The Lending Coach

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

Now Is the Time to Apply for a Mortgage – Mid-March 2025

gray and black desk calculator

If you’ve been sitting on the sidelines waiting for the “perfect time” to buy a home, this might be the sign you’ve been looking for.

Mortgage applications just jumped 20% in a single week, according to the latest CNBC report, mostly due to falling interest rates.

two red balloons with percentage symbols on white background

What does that mean for today’s buyer? It means the window of opportunity is open—but it probably won’t stay open forever.

Mortgage demand is surging as rates drop. Don’t wait—now’s the time to apply and lock in your opportunity before competition heats up.

What’s Happening in the Market

After months of higher rates, interest rates have dropped, and homebuyers are wasting no time. More buyers are getting pre-approved, locking in rates, and hitting the market before competition picks up even more.

We’re already seeing the shift. The number of mortgage applications surged, and with spring homebuying season just around the corner, this is just the beginning.

man couple woman wooden sign

When demand for homes pick up, so will the price of buying that home.  You can find out more on that here…

Why Do a Mortgage Application Now?

Here’s what’s happening in the marketplace today:

  • Rates dropped – and we don’t know how long they’ll stay this on this downward trend.
  • Competition is rising – as more buyers jump back into the market, the best homes will go fast…and the rest will become more expensive.
  • Waiting could cost you – not just in rate increases, but also in bidding wars as demand grows.

What This Means for Would-Be Buyers

If you’re serious about buying this year, you have a couple of choices:

Hourglass with house
  1. Take advantage of today’s rates and get pre-approved before the rush.
  2. Wait, hope rates stay low, and risk higher prices and more competition.

The Bottom Line

There’s a lot in this housing and mortgage market you can’t control. But getting ahead of rising competition and securing a better rate is something buyers can do right now!

If you’ve been thinking about buying, do reach out to me here.

We can take a look at your options, answer any questions, and help you get prepared to take full advantage of this moment.

The Lending Coach

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

The Lending Coach 2025 Mortgage and Real Estate Forecast

My 2025 real estate and mortgage forecast will take a look at inflation, the labor markets, and the Federal Reserve to help us better understand what we can expect in the coming year.

Tom Bonetto pic

These 3 factors portend for potentially lower mortgage rates over the course of this year…while home values will continue to rise.

Right now, housing supply is still relatively low, and demand is growing – and that means home price appreciation. 

On the mortgage side, will interest rates finally come back?  Let’s take a look at the factors that will most impact real estate and mortgages in 2025…

Inflation

The single biggest driver of bond yields AND mortgage rates is inflation.

Mortgage rates are essentially determined by inflation, which erodes the buying power of the fixed return that a mortgage holder receives.  When inflation rises, lenders demand a higher interest rate to offset the more rapid erosion of that buying power.

Inflation sign

And that’s what we’ve been seeing over the last 3 years.

When the Fed hikes rates, they are trying to slow the economy and curb inflation. If successful in cooling inflation, mortgage rates will decline.

When they lower rates, the Fed is trying to spur economic growth with more availability to less expensive capital. 

As I’ve mentioned previously, the Federal Reserve botched their management of inflation in 2020 and 2021 and were forced to make severe changes to offset the damage.  This brought market instability and increased mortgage rates.

Inflation has remained stubbornly high over the last year, but news on the horizon looks promising.

As a matter of fact, I believe that the current data (the Personal Consumption Index or PCE) is overstating inflation by about .4%

PCE Overstated

Once this is worked out, we should see the inflation numbers come down, leading the Fed to want to reduce the Federal Funds rate.

One of the largest components in the PCE is “shelter costs”, or rents.  You can see in the chart below that these costs have been dropping regularly, and this trend will show up in the months ahead.

PCE shelter reading slide

The trend in inflation is working in the borrower’s favor, and it means the Fed’s going to have to look at cutting the Federal Funds rate even more in 2025.

You can find out more on inflation, The Federal Reserve, and mortgage rates here…

It looks like core inflation might be in the low 2% range by the middle of this year, which bodes well for lower mortgage rates.

One wild card, however, will be how the bond market views the ever-expanding federal deficit and debt.  The level of government spending isn’t giving great comfort to those who regularly purchase government bonds, so this is something everyone needs to be watching. Increased debt loads could move bond yields higher, which will not help mortgage rates.

The Labor Market

There has been much discussion about the labor markets and employment data this year.

Bricks and mortar

Estimates by the Federal Reserve Bank of Philadelphia indicate that the employment changes from March through June 2024 were significantly different compared with preliminary state estimates from the Bureau of Labor Statistics’ (BLS).

This year the BLS stated that the US economy added nearly 2.5 million new jobs…but the Quarterly Census of Employment and Wages (QCEW) done by the Philadelphia Fed showed growth of only 1.25 million jobs.

That’s a 50% discrepancy!  One might even conclude that the BLS numbers were potentially inflated due to election posturing.

Nevertheless, here’s what’ currently happening regarding employment:

Unemployment rate rising slide

As you can see, unemployment is up nearly 1% over the last 18 months and is continuing to rise.

Secondly, the duration of an average unemployment stay (based on how long a laid-off employee receives unemployment benefits) is up 21% over the last 7 months and is continuing to rise:

Unemployment duration slide

This means that finding a job once you’ve been laid off is getting tougher, signaling a tightening labor market.

Next, there are few jobs available right now, per the Bureau of Labor Statistics:

Job openings slide

There are 30% fewer job openings since January of 2023.  So…the unemployment rate is moving higher, job openings are dropping, and people are collecting unemployment for a longer amount of time.

My thinking here is that the labor market isn’t in as good of shape as many in Washington think.  This may bode well for mortgage rates if these trends continue

The Federal Reserve

For starters, the Federal Reserve’s “dual mandate” is to keep prices stable AND achieve maximum employment.

Jerome Powell

It does this by controlling the money supply, and raising or lowering interest rates when the economy is slowing down or growing too fast.

We’ve seen this in the last year, when the Fed reduced its Federal Funds rate by 100 basis points, as inflation started to wane.

When the Fed cut interest rates in September, many hoped it would kick-start the frozen housing market. Mortgage rates track the 10-year US Treasury yield, which was expected to fall in anticipation of further rate cuts. However, recent economic data has looked stronger than expected, which has shifted the market’s expectations, sending bond yields higher.

Today, most analysts believe that the Fed will continue to cut its lending rate…and that it might well spur mortgage rates to follow this time around.

Per the diagram below, the majority of Fed members believe that the Federal Funds rate (currently at 4.375%) will be lowered to 3.875% sometime in 2025. 

Fed dot plot slide

However, with the labor markets numbers being potentially over inflated, many believe that many more Fed voting members will change their tune if/when unemployment numbers start to rise.

And as shown earlier, there’s a very good chance that the unemployment rate might very well rise in the months ahead, forcing the Fed to cut their interbank lending rate even further.

Most Fed members believe that unemployment will stay between 4.2% and 4.3% – with a few thinking it could go as high as 4.5%:

Fed unemployment forecast

But what if inflation moves higher?  What if the recent corporate layoffs mentioned previously start to show more in those labor reports?

My guess is that the Fed will lower rates to stave off higher inflation…which should be good for mortgage rates.

Mortgage Rate Forecast

As mentioned previously, the 30-year mortgage rate generally follows the path of the 10-year treasury bond. Today, the 10-year yield is hovering right around 4.5%.

But how does that relate to mortgage rates?

Well, the historical spread between the 30-year fixed mortgage rate and the 10-year treasury is between 1.6% and 2% – or averaging around 1.8%. Meaning, that if the 10-year yield is at 4%, mortgage rates should be right around 5.8% (4% yield plus 1.8% spread).

However, today’s market is skewed…mostly due to the 2020/2021 event and it’s resulting hangover.  Take a look:

Rate spread slide

As you can see, today’s spread is over 2.5% – far outside of historical norms. And, it’s declining, which is good news.

It September of 2024, the 10-year yield touched 3.6% (and it spurred a fair amount of refinance activity for about 3 weeks, before they rose to 4% in early October):

Where could rates go slide

So, what if the current spread went from 2.5% to just 2.25% AND the 10-year treasury dropped to 3.5%?  Rates could look like this:

6 month forecast slide

And this absolutely could happen this year.  Based on inflation and employment data – coupled with continued spread reduction, mortgage rates in the high 5% range is quite realistic.

As mentioned previously, the wild-card will be how the bond market views government spending a debt.

Paper home on grass

Real Estate Forecast

Let’s turn our attention to real estate and what we can expect in 2025.

The forecast for real estate centers once again on supply and demand, and the supply continues to be tight…more on that later.

First, though, let’s take a look at what’s happening with the home buying demographic.  As you can see in the chart below, there are plenty of opportunities for buyers in the Millennial age category…and the Gen Z group isn’t too far behind:

Demographics slide

We will see great homeowner growth in both Gen Z AND Millennials over the next few years.

At the same time, will new home construction keep up to fill this demand?  Let’s take a look.

First, active listings have fallen significantly since pre-Covid.  Listings are down 21% since 2018 AND the population has grown by over 12M people.  Yes, listings are up year-over-year (which is good news, indeed), but nowhere near what’s required.

Household formations (or the amount of NEW households being created through cohabitation or marriage) tells the story of how many new homes are needed every year.  Interestingly, the statistic has remained very constant at right around 1.9M per year:

Household formations slide

On the other hand, new homes being built is remaining constant at 1.3M per year:

Housing starts slide

As you can see, there are far more households being formed than builders putting up new homes. This is why the real estate market has been so strong of late and why you we seeing prices increase due to a lack of inventory. It’s going to be a similar story for 2025 and more.

Formations and Starts slide

So, what does this mean? 

Well, it means that home prices will continue to appreciate…and that will accelerate even faster when mortgage rates improve.

RE Forecast slide

I see appreciation in 2025 at over 4% for the year AND appreciation over the next 5 years to be over 30%.  This means real estate is a good buy right now and will help create great wealth in the future.

In Conclusion

Here’s what I think will happen in 2025:

Forecast slide

It’s looking like 2025 will be an interesting year…and one that will have solid wreath-building opportunities available.  Do reach out to me to discuss how you might be able to move forward in 2025 to take advantage of this changing market!

If it’s easier, you can set an appointment with me here…

The Lending Coach

This Market Update and similar such communications are for informational purposes only and are based on publicly available information. These materials are general communications, which are not impartial, and are provided solely for discussion purposes, and not in connection with any product or service offering. The opinions and views expressed in this Market Update are as of the date of this communication and are subject to change. Any forward-looking views and statements contained in this Market Update are based on current estimates or expectations of future events or results. Actual results may differ materially from those described in this Market Update. The views expressed in this communication should not be attributed to Guild Mortgage Company as a whole and may not be reflected in the strategies and products offered by Guild Mortgage Company.

Today’s Wealth Creation Opportunity in Housing

hard cash on a briefcase

Articulating the financial opportunity that exists in homeownership is more important than ever. Especially as media misinformation continues to spread doom and gloom about the housing market – and endlessly predicting crashing home prices…incorrectly, of course.

Cart with cash and house

The reality is that national home price gains continue…and in fact have reached new record highs, even in the face of high mortgage rates and rising inventory!

Home Prices

The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices nationwide rose 0.3% from April to May after seasonal adjustment, breaking the previous month’s all-time high.

The 0.3% gain is the seasonally adjusted number, which considers the typically stronger appreciation seen during this time of the year. The non-seasonally adjusted figure showed that home values rose 0.9% in May alone.

Home values in May were also 5.9% higher than a year earlier, following a 6.3% annual gain in April.

Case Shiller Home Price Index

The deceleration in the annual reading was due to a larger home price appreciation figure from May 2023, which was removed from the rolling 12-month calculation when the figure for May 2024 was added.

S&P DJI’s Head of Commodities, Brian D. Luke, explained, “While annual gains have decelerated recently, this may have more to do with 2023 than 2024, as recent performance remains encouraging. Our home price index has appreciated 4.1% year-to-date, the fastest start in two years.”

Should Buyers Wait?

Luke also addressed the crucial question many prospective buyers have wondered about: Should I wait for rates to move lower before buying a home?

He noted that all 20 cities in their composite index have observed annual gains for the last six months as “the waiting game for the possibility of favorable changes in lending rates continues to be costly for potential buyers as home prices march forward.”

black handled key on key hole

And Case-Shiller was not alone in their reporting, as home price gains have also been seen in the other major indexes across the country. CoreLogic’s Home Price Index showed that prices rose 0.6% in May after rising 1.1% in April and 1.2% in March, confirming it’s been a strong season for home values nationwide.

Prices are also 4.9% higher when compared to May of last year.

In addition, ICE (formerly known as Black Knight) reported that national home values rose 0.3% in May after seasonal adjustment, with their index showing that prices are 4.6% higher than a year ago.

The Federal Housing Finance Agency’s House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts, also showed that home prices were flat in May and are up 5.7% year over year.

In Conclusion

The bottom line is that housing still proves to be one of the best investments for wealth creation. And it’s not too late for people to start building wealth through homeownership.

As the famous Chinese Proverb says, “The best time to plant a tree was 20 years ago. The second best time to plant a tree is today.”

Reach out to me for more information, as I’d be happy to strategize with you to see how can best take advantage of today’s real estate opportunities!

The Lending Coach

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

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