US mortgage rates dip to lowest since October, 30-year loans fall to 6.26%; refinancing demand surges

The average rate on a 30-year US mortgage fell again this week, reaching 6.26%, marking the lowest level since early October, amid a decline in long-term Treasury yields and the Federal Reserve’s first rate cut of 2025, mortgage buyer Freddie Mac said Thursday.

Last week, the rate was 6.35%, and a year ago it averaged 6.09%.Rates on 15-year fixed mortgages, popular among homeowners refinancing their loans, also eased to 5.41% from 5.5% last week, compared with 5.15% a year ago. Mortgage rates generally track the 10-year Treasury yield, which was 4.12% in midday trading Thursday, up from 4.06% late Wednesday, AP reported.Mortgage rates have steadily declined since late July as expectations grew that the Fed would cut rates for the first time since 2024.

On Wednesday, the central bank delivered a quarter-point cut and projected two more reductions this year amid concerns over the US job market.“Mortgage rates have eased into the low 6% range, a shift that should support a modest pickup in home sales in the coming months,” said Jiayi Xu, senior economist with Realtor.com. She added that the broader impact may remain limited, as 81% of homeowners hold mortgages below 6%, reducing incentives to sell or move.

The decline in rates has sparked a surge in refinancing, particularly among homeowners who took loans when rates were above 6%. Mortgage applications, including purchases and refinancing, jumped nearly 30% last week compared with the prior week, with refinancing loans accounting for nearly 60% of the total, according to the Mortgage Bankers Association.Demand for adjustable-rate mortgages (ARMs) also rose sharply, making up about 13% of all applications — the highest share since 2008. “For consumers, it’s another signal that the cost of borrowing is gradually moving lower,” said Bill Banfield, chief business officer at Rocket Cos.