Mortgage Rates Ease to 7.24% as Fed Keeps Benchmark Unchanged

The average 30-year fixed mortgage rate fell to 7.24% in the week ending October 29, offering a modest improvement for homebuyers even as the Federal Reserve left its benchmark rate unchanged and signaled continuing concern about inflation.

Freddie Mac reported a decline from 7.32% a week earlier. The 15-year fixed average fell to 6.60% from 6.68%.

Both remained higher than their year-earlier levels. At the comparable point in 2025, the averages were 6.17% for a 30-year loan and 5.41% for a 15-year mortgage.

The weekly easing therefore reduced borrowing costs relative to the previous week’s offers without restoring the financing conditions available a year earlier.

A Small Rate Change Has a Monthly Effect

Freddie Mac chief economist Sam Khater said the decline modestly increased prospective buyers’ purchasing power. The company’s survey described the 30-year average as its lowest level that month.

For an illustrative $400,000 loan repaid over 30 years, principal and interest at 7.24% would be about $2,726 a month, compared with $2,748 at 7.32%. That is approximately $22 less each month.

At the year-earlier average of 6.17%, the same loan would require about $2,442 monthly. The illustration holds the loan balance and term constant and excludes taxes, insurance, fees and any rate-buydown points.

Freddie Mac’s survey focuses on conventional, conforming, fully amortizing purchase loans for borrowers with excellent credit and a 20% down payment. It is a market benchmark, not a guaranteed offer for every applicant.

Fed Pause Includes Two Votes for Higher Rates

The Fed voted 10-2 on October 28 to maintain its federal funds target range at 3.75% to 4%. Governor Lisa Cook and Cleveland Fed President Beth Hammack preferred a quarter-point increase, Reuters reported.

The committee said inflation remained elevated and upgraded its description of economic expansion from “solid” to “strong.” Its statement said additional information would help determine the policy needed to return inflation to 2%.

Several market analysts quoted by Reuters interpreted the decision as a pause rather than the start of rate cuts. Some expected another increase in December, although that remained their forecast, not a decision announced by the Fed.

Mortgage Pricing Does Not Track Each Fed Decision Directly

The federal funds target governs a short-term interest rate. Mortgage lenders also respond to longer-term bond yields, inflation expectations and the market for mortgage-backed securities, so their pricing can change even when the Fed stands still.

The two developments this week show that distinction: the Fed made no change to its benchmark, while the mortgage survey average declined.

For a buyer, the relevant offer still depends on credit, down payment, loan characteristics and lender charges. A lower advertised interest rate can come with different upfront costs, which is why the rate and the rest of the loan estimate need to be considered together.

The latest survey provides a modestly better weekly comparison. The broader picture remains one of mortgage rates above their year-earlier level and policymakers still debating how much restraint inflation requires.

References: Mortgage Rates Decline Further to 7.24%