F
ed’s second consecutive 25‑basis‑point cut this week has nudged mortgage rates lower. The 30‑year fixed‑rate average fell to 6.17%, its fourth straight week of decline, according to Freddie Mac. Although the Fed’s policy rate doesn’t directly set mortgage rates, it influences them; markets had largely priced in the move, so rates slipped ahead of the announcement. With another cut expected before year‑end, 2025’s averages are the lowest yet.
Mortgage rates generally follow Treasury yields, but adjustable‑rate mortgages (ARMs) and home‑equity lines feel the Fed’s moves more directly. ARMs now account for about 10 % of all mortgage applications—the highest in nearly two years. A 5/1 ARM averaged 5.66% in September, roughly one percentage point below the 30‑year fixed rate, saving a $400,000 loan roughly $200 a month. Buyers cite lower initial costs, but must weigh the risk of future rate hikes. “Talk to a lender first,” advises LendingTree’s Matt Schulz.
Fixed‑rate buyers also benefit. The 30‑year average is at its lowest for the year, and mortgage applications rose 5 % last week, 20 % above the same period a year ago. Existing‑home sales grew 4.1 % in September, signaling renewed activity. A LendingTree study found that the drop from above 7 % at the start of the year to mid‑6 % in July saved buyers an average of $40 000 over a 30‑year loan, or about $112 per month. Further rate declines could increase those savings.
**Weekly national averages (ending Oct. 30):**
- 30‑year fixed: 6.17% (down from 6.19%) – 6.72% a year ago.
- 15‑year fixed: 5.41% (down from 5.44%) – 5.99% a year ago.
