US Mortgage Rates Fall to 7.32 Percent on October 22

Higher borrowing costs continued to weigh on the US housing market as mortgage rates declined for the first time in more than two months. On October 22, 2026, Freddie Mac reported that the average rate on a 30-year fixed-rate mortgage had fallen to 7.32 percent from 7.40 percent the previous week, offering limited relief to prospective homebuyers facing affordability challenges.

Despite the decline, mortgage applications for home purchases fell 7 percent over the week through Friday, according to the Mortgage Bankers Association. The average 30-year mortgage rate also remained substantially above its 6.19 percent level from one year earlier, according to Freddie Mac.

The average rate on a 15-year fixed-rate mortgage declined to 6.68 percent from 6.71 percent the previous week. A year earlier, the rate stood at 5.44 percent, highlighting the continued increase in borrowing costs for homeowners and prospective buyers.

Freddie Mac's figures showed a modest weekly improvement, but housing affordability remained a significant obstacle for households considering a purchase. Bob Broeksmit, president and CEO of the Mortgage Bankers Association, described the conditions facing prospective buyers.

"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, president and CEO of the Mortgage Bankers Association.

Separate industry data released by the Mortgage Bankers Association showed that total mortgage application volume decreased 5.3 percent in the previous week on a seasonally adjusted basis. Applications to purchase homes dropped 7 percent week over week and were 18 percent lower than during the same period a year earlier.

Refinancing activity also weakened, although its weekly decline was smaller. Applications to refinance existing mortgages fell 2 percent from the previous week and stood 59 percent below the year-earlier level, according to the association.

Joel Kan, an economist at the Mortgage Bankers Association, said the latest decline in borrowing costs had not translated into stronger demand for home loans.

"Mortgage rates decreased for the first time in over two months," said Joel Kan, an MBA economist, in a release.

The association's figures showed that purchase and refinancing activity continued to contract despite the lower average contract rate. Borrowers remained sensitive to the broader increase in mortgage costs compared with the previous year.

"However, lower rates were not enough to boost application activity, as both purchase and refinance applications continued to decline," said Joel Kan, an MBA economist.

Adjustable-rate mortgages also remained an option for eligible buyers seeking lower initial borrowing costs. The association reported that adjustable-rate mortgages accounted for 10.5 percent of applications, with their rates nearly a full percentage point below those of 30-year fixed-rate loans.

Kan described the role of these loans in the current market.

"The ARM share held steady at 10.5 percent, as ARM rates remained almost a full percentage point lower than the 30-year fixed rate, giving qualified borrowers a lower rate option to purchase a home," said Kan.

Mortgage costs have been influenced by movements in the US Treasury market, inflation expectations and uncertainty surrounding the economic outlook. Mortgage rates generally track the 10-year Treasury yield, which lenders use as a reference when pricing home loans.

According to ABC News, the 10-year Treasury yield stood at 5 percent around midday Thursday, after rising above 5.30 percent earlier in October. Before the US war with Iran began in late February, the yield was 3.97 percent. The conflict contributed to higher oil prices and inflation pressures, while bond-market volatility also pushed yields upward.

Recent easing in Treasury yields helped mortgage rates stabilize before their latest decline. Yahoo Finance reported that investors had moved toward safe-haven assets amid growing political and economic unrest in Europe.

Mortgage News Daily reported that mortgage rates ended Wednesday broadly unchanged after beginning the day slightly lower. The outlet attributed the movement partly to weakness in the bond market and fluctuations associated with trading positions in Treasury options.

Matthew Graham, chief operating officer at Mortgage News Daily, cautioned against drawing a firm connection between oil prices and mortgage-rate movements.

"But we'd caution against placing too much emphasis on the oil price correlation," wrote Matthew Graham, chief operating officer at Mortgage News Daily.

Graham said the relationship between oil prices and mortgage rates had been unreliable for more than a month. Meanwhile, September pending home sales declined sharply, according to a report from the National Association of Realtors cited by CNBC, reflecting the impact of elevated borrowing costs on housing demand.