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Mortgage Rates Plunge to 1-Year Low as Treasury Yields Dip
23 Oct
Summary
- Mortgage rates drop to lowest level in over a year
- 10-year Treasury yield falls below 4% this week
- Traders expect Fed to cut rates at upcoming meeting
As of October 23rd, 2025, mortgage rates have fallen to their lowest level in over a year, with the average 30-year rate dropping to 6.19% from 6.27% a week earlier. This downward move comes as the 10-year Treasury yield, which mortgage rates closely track, fell below 4% and remained there throughout the week.
The decline in mortgage rates is being driven by several factors. Firstly, Wall Street is bracing for a prolonged government shutdown, leading investors to flock to safe-haven assets like Treasuries and pushing yields lower. Secondly, markets are pricing in a likely rate cut from the Federal Reserve at its upcoming meeting next week, with traders seeing near-certain odds of a 25-basis-point reduction.
The lower mortgage rates are now starting to bring buyers off the sidelines, with existing home sales rising 1.5% in September from the previous month. However, the government shutdown has delayed the release of most data reports that typically influence mortgage rates, including the September Consumer Price Index data due on Friday. Hotter-than-expected inflation could cause traders to reassess their views on the Fed's rate-cutting path, potentially sending mortgage rates higher again.
