U.S. Mortgage Rates Hit Lowest Point Since October 2024, Boosting Homebuyer Sentiment

Core Insights - U.S. mortgage rates have reached their lowest point in over a year, with the average 30-year fixed-rate mortgage at 6.15% for the week ending December 31, 2025, down from 6.18% the previous week and significantly lower than 6.91% a year ago [2][8] - The 15-year fixed-rate mortgage also decreased to an average of 5.44%, down from 5.50% last week and lower than 6.13% a year ago, indicating a positive trend in borrowing costs [3][8] Market Impact - The decline in mortgage rates is expected to boost the housing market, which has been struggling with affordability issues throughout the year [3] - Freddie Mac's Chief Economist, Sam Khater, noted that the reduction in rates has led to a 10% increase in homebuyer purchase applications compared to the same period last year, reflecting growing consumer confidence in homeownership [4] Economic Factors - Mortgage rates are influenced by the Federal Reserve's interest rate policies and bond market expectations regarding the economy and inflation, suggesting a favorable environment for buyers and those looking to refinance [5]