The mortgage rate forecast this October may be an encouraging one for some homebuyers.
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Mortgage interest rates plunged to a three-year low last month, right before the Federal Reserve's long-awaited rate cut. In recent weeks, however, they have begun to tick up slightly, coming in at 6.34% for a 30-year fixed-rate mortgage as of October 2nd, according to FreddieMac. Despite that, mortgage interest rates are still comfortably below the 7%-plus range they were found at earlier in the year.
Now that we're in October, many prospective homebuyers may be wondering whether the month will bring another mortgage interest rate drop or increase. The Federal Reserve is meeting again later this month, and further rate cuts are widely expected, based on data from the CME Group's FedWatch tool. So, is now a good time to lock in a rate? We spoke to several home lending experts about the mortgage interest rate forecast for October and what to expect.
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What's the mortgage interest rate forecast for October 2025?
Various factors influence mortgage interest rates, so there isn't a singular driver that determines whether they'll increase or decrease. Here's what could impact rates this month, specifically:
The Federal Reserve's next meeting
At the end of October, the Federal Reserve will convene again to discuss the direction of the federal funds rate. Though the Fed held the federal funds rate steady for most of 2025, it issued its first rate cut in September by a quarter percentage point. While the decrease was welcome news for many, it didn't necessarily translate to even lower mortgage rates.
"After the Federal Reserve cut rates in September, mortgage rates actually went up…The reason for this is because mortgage rates act based on anticipation of what will be, and not based on the actuality of what happened," explains Shmuel Shayowitz, president and chief lending officer at Approved Funding, a licensed mortgage bank. "So, in anticipation of the Federal Reserve cutting rates in September, mortgage rates went down."
In other words, the dip in mortgage rates in September was driven in large part by the anticipation of the cut, not the event itself. Additionally, mortgage rates tend to closely follow the 10-year Treasury yield, not necessarily the direction of the federal funds rate. Another rate cut may happen in October. In anticipation of that, mortgage rates could drop again. But similar to September, that may already be factored in.
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The latest economic data
Economic factors like inflation and employment can impact mortgage rates. The latest inflation data shows a slight increase, while the labor market is a growing concern. Just how these economic factors will impact mortgage rates is unclear.
"I think the outlook for right now is a little bit cloudy," notes Chester Spatt, professor of finance at Carnegie Mellon University's Tepper School of Business. "The Federal Reserve itself has a difficult balancing act, because on the one hand, they're concerned about boosting employment, because employment has been sluggish, it's fair to say, in recent months," adds Spatt. "But on the other hand, they're also very concerned about managing the possibility of renewed inflation from tariffs and from other causes as well."
Typically, data released by agencies like the Bureau of Labor Statistics provides key insights into economic trends. However, the current government shutdown has caused some delays.
"We're waiting on a jobs data report that's no longer going to be coming out [on time], so we're trying to pay attention to some cues about job loss to see what the economy looks like," says Christopher Thomas, a mortgage loan originator and vice president at Iris Mortgage. "And if it's bad, we could have some indicators that rates could decrease in the future, or know that in future Fed meetings, they might be looking at slashing rates again."
So what does that mean for mortgage rates in October? "It's going to be very data-dependent. The market is very reactive in this moment," says Evan Luchaco, home loan specialist at Churchill Mortgage. "What I'm seeing right now is that we're likely to see them stay the same in October."
The bottom line
The experts we spoke to believe that the mortgage rate forecast for October shows little change. While there may be some fluctuations, they expect mortgage interest rates to stay roughly the same. If you're wondering whether to lock in a rate now or wait until further rate drops, consider your goals and unique situation.
Shayowitz suggests that homebuyers review their financial circumstances to help guide their decision, instead of speculating on what the market may or may not do. Whether there is a mortgage interest rate rise or drop is largely out of your control. But you can focus on improving your credit score by reducing your debt-to-income ratio and making on-time payments. Take the time to closely compare lenders and offers, too, to determine which is offering the most competitive rates.
