Mortgage rates are falling again following the Federal Reserve’s latest rate cut, giving both home buyers and homeowners renewed hope for affordability. For the second consecutive time, the Fed lowered its benchmark interest rate by 25 basis points this week, and mortgage rates have responded positively. The average 30-year fixed-rate mortgage dropped to 6.17%—its fourth straight week of decline—according to Freddie Mac.

While the Fed’s benchmark rate doesn’t directly set mortgage rates, it often influences them. “Markets widely anticipated the Fed’s move, and much of its impact was already priced in—meaning mortgage rates had moved lower ahead of the announcement,” said Bill Banfield, chief business officer at Rocket Mortgage. With another potential rate cut projected before year’s end, mortgage rates are now hovering at their lowest averages of 2025.

Adjustable-rate mortgages (ARMs) may feel the Fed’s influence even more directly. ARMs have been gaining popularity among buyers seeking lower upfront costs. In September, ARMs represented about 10% of all mortgage applications—the highest level in nearly two years, according to the Mortgage Bankers Association. A typical 5/1 ARM averaged 5.66%, nearly a full percentage point below the 30-year fixed-rate average, saving borrowers roughly $200 per month on a $400,000 loan.

“There’s certainly a lot more interest in adjustable-rate mortgages as people look for anything that can reduce the initial cost of buying a home,” said Matt Schulz, chief consumer finance analyst at LendingTree. However, he cautioned that buyers should understand the potential risks—when rates adjust, payments can rise significantly. Consulting a lender before choosing an ARM is essential, he added.

Even fixed-rate borrowers are finding relief. The average 30-year fixed mortgage rate has now reached its lowest point of the year. “The last few months have brought lower rates, and home buyers are increasingly entering the market,” said Sam Khater, Freddie Mac’s chief economist. Mortgage purchase applications rose 5% last week and are up 20% from a year earlier, according to MBA data. The National Association of REALTORS® also reported a 4.1% annual increase in existing-home sales for September.

The drop in mortgage rates—from above 7% earlier this year to the mid-6% range—has generated significant savings for buyers. A LendingTree analysis found that borrowers saved an average of $40,000 over the life of a 30-year loan, or about $112 per month, compared to rates from earlier in 2025. With further declines in sight, affordability could continue to improve.

Freddie Mac’s latest weekly survey shows:

• 30-year fixed-rate mortgages: 6.17%, down from 6.19% last week (6.72% a year ago).
• 15-year fixed-rate mortgages: 5.41%, down from 5.44% last week (5.99% a year ago).