US Mortgage Rate Falls to 7.32%, but Housing Strain Persists

The average US 30-year fixed mortgage rate declined to 7.32% from 7.40% in the week reported on October 22, marking its first retreat since late August. Economic Times Markets, citing mortgage buyer Freddie Mac, reported that the fall offered prospective buyers some relief, though the benchmark remained substantially above its 6.19% level a year earlier.

The average rate for a 15-year fixed mortgage, a loan often used by homeowners refinancing their borrowing, also edged lower—to 6.68% from 6.71% the previous week. A year earlier, that rate stood at 5.44%.

Treasury yields ease, but borrowing remains expensive

Mortgage pricing responds to inflation, Federal Reserve policy and investors’ economic expectations. Lenders generally use the 10-year US Treasury yield as a reference when setting home-loan rates.

According to the report, that yield had mostly declined over the preceding two weeks after reaching its highest level since 2002. It stood at 5% around midday Thursday, below the more than 5.30% recorded earlier in October.

The report links the rise in mortgage rates since late February to the US war with Iran, higher oil prices and inflation, alongside bond-market volatility that lifted Treasury yields. It puts the pre-war 10-year yield at 3.97%, well below Thursday’s level.

A small weekly decline does not reverse the affordability squeeze

The 30-year mortgage average briefly reached 5.98% in late February, its lowest point since late 2022. The subsequent increase to the latest average has raised the monthly cost of financing a $400,000 home loan by roughly $355, according to the report’s calculation.

Higher monthly payments reduce buyers’ purchasing power and can lead households to delay a purchase. The report describes US home sales as largely stalled this year, following a prolonged housing downturn that began in 2022 as mortgage rates rose from pandemic-era lows. Sales of previously occupied homes were essentially unchanged last year, remaining at a 30-year low.

The published averages are not guaranteed offers: an individual borrower’s rate can be higher or lower depending on income, credit and other lending factors.

Fannie Mae forecasts rates staying elevated

In its latest forecast cited in the report, mortgage buyer Fannie Mae expects the 30-year rate to average 7.4% in the final quarter of 2026 and 7.5% in 2027. Those projections—not realised outcomes—point to continued financing pressure despite this week’s decline.