Freddie Mac data confirms the first weekly rate decline since August, but housing headwinds remain steep for US brokers
For the first time since late August, American homebuyers got a break. The benchmark 30-year fixed-rate mortgage fell to 7.32% for the week ending October 22, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS).
That ends a seven-week streak of consecutive gains and pulling back from the 7.40% three-year high set the prior week. A year ago, the same rate averaged 6.19%.
“The average 30-year fixed-rate mortgage declined this week, offering some relief to prospective homebuyers,” said Sam Khater, chief economist at Freddie Mac in McLean, Virginia.
The 15-year fixed-rate mortgage – widely used by borrowers refinancing an existing loan – also declined, to 6.68% from 6.71% last week, compared with 5.44% one year ago.
Bond market shift ends seven-week rate climb
The week’s retreat traces to a softening of the 10-year Treasury yield, which averaged approximately 5.13%, down from 5.24% the prior week, as investors sought safe-haven assets amid geopolitical and economic turmoil in Europe.
Rates have been rising since late February, when the US-Iran conflict pushed oil prices and inflation higher.
The seven straight weeks of rate increases that culminated at 7.40% added roughly $355 to the monthly cost for a borrower financing a $400,000 home loan, compared with late February’s brief 5.98% low.
Housing demand retreats despite this week’s relief
Demand data offer little grounds for optimism. Mortgage applications for new home purchases fell 7% in the latest week, according to the Mortgage Bankers Association (MBA).
September housing starts declined 5.2% month-over-month and 7.4% year-over-year, per the U.S. Census Bureau, while pending home sales also fell to their lowest recorded level, according to the National Association of Realtors (NAR).
Mortgage applications fell last week despite lower rates. Joel Kan of the Mortgage Bankers Association says affordability pressures continue to limit buyer activity. https://t.co/89rtC1fU8r
— Mortgage Professional America Magazine (@MPAMagazineUS) October 21, 2026
“It’s not surprising that when rates climb above 7%, fewer people buy homes because fewer people can afford them,” said Chen Zhao, head of economic research at Redfin.
“The housing market continues to face significant headwinds as elevated mortgage rates and affordability pressures keep many prospective buyers on the sidelines,” said Bob Broeksmit, MBA president and CEO.
Looking ahead, the Federal Open Market Committee (FOMC) meets in November, with CME FedWatch placing hold odds at approximately 85% and December rate hike odds near 90%.
Fannie Mae projects the 30-year rate will average 7.4% in the fourth quarter of 2026 and 7.5% throughout 2027.
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