Key Highlights

● Freddie Mac's 30-year fixed mortgage rate edged lower from the prior week.

● Lennar jumped to about $84.45 as Treasury yields fell.

● Home Depot rose to $327.73 on the prospect of cheaper borrowing.

● About two of every three S&P 500 stocks rose on Thursday.

Mortgage rates eased again this week, according to Freddie Mac's weekly survey released Thursday, October 22. The average rate on a 30-year fixed-rate mortgage edged lower from the previous week, offering a little relief to prospective buyers who have faced high borrowing costs.

The decline came on the same day the 10-year Treasury yield closed back below a closely watched threshold for the first time since September 22, raising hopes that mortgage rates could keep drifting lower.

Why mortgage rates follow Treasuries

Freddie Mac's Primary Mortgage Market Survey, published on Thursdays, tracks the average rates lenders offer on home loans. Those rates tend to move with the 10-year Treasury yield, because lenders price long-term mortgages off long-term government borrowing costs.

The 10-year yield has come down from a peak on October 7, when it hit its highest level since April 2002. On Thursday, it posted its biggest one-day drop since August 2025, according to some data providers, although others dated the milestone back to March 2023.

The bond rally was fueled by a selloff in AI and chip stocks. "Treasuries rallied overnight as tech stocks came under pressure amid renewed AI valuation fears," a rates strategist said.

Homebuilders and housing stocks surge

Housing-related stocks rallied on the prospect of cheaper borrowing. Lennar (NYSE:LEN) jumped to about $84.45 with no company-specific news, and D.R. Horton (NYSE:DHI) also surged. An exchange-traded fund tracking homebuilders rallied strongly at midday.

PulteGroup (NYSE:PHM) climbed even though its quarterly revenue of $3.97 billion missed estimates and closings fell. CEO Ryan Marshall cited high mortgage rates and inflation as weighing on entry-level demand, a reminder of why falling rates matter so much to builders.

The rally reached further. Home Depot (NYSE:HD) rose to $327.73, Mohawk Industries (NYSE:MHK) jumped to $128.70 and Whirlpool (NYSE:WHR) rose to $28.80. Builders FirstSource (NYSE:BLDR) rallied despite a brokerage downgrade, and Equifax (NYSE:EFX) climbed after an upgrade, with the mortgage-rate backdrop also cited as a tailwind. Zillow surged on rate relief.

Still elevated by historical standards

Despite the latest dip, mortgage rates remain high, and affordability is still a challenge, as PulteGroup's comments showed. The Fed raised its benchmark rate in September, its only hike this year, and markets expect about one more increase before year-end.

Inflation risks could also stand in the way of further declines. Brent crude climbed to $113.17 on Thursday, its highest since May 4. Yet the bond market appeared unconcerned for now. "If oil is about to spark an inflation wave, the bond market hasn't heard about it," one market commentator said.

The job market remains firm, with initial jobless claims falling to 194,000, the fewest in about three months.

The broader market

The housing rally was part of a larger rotation. While the Nasdaq Composite sank 694.00 points and the S&P 500 posted its worst day since July, about two of every three S&P 500 stocks rose. Consumer staples and health care closed at records.

Next Thursday's mortgage survey and the Fed

The Federal Reserve announces its decision on October 28, and markets were pricing only a small chance of a hike. Third-quarter GDP and September PCE inflation arrive on October 29. Friday brings S&P Global purchasing managers' surveys and the final University of Michigan sentiment reading. Freddie Mac's next weekly survey, due next Thursday, will show whether Thursday's bond rally feeds through into lower mortgage rates.