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There’s more good news on the homebuying front.
Housing affordability is now the best it’s been in more than two and a half years, according to the October 2025 ICE Mortgage Monitor report.
“With 30-year mortgage rates averaging 6.26% in mid-September, the monthly principal and interest (P&I) payment on an average-priced home has fallen to $2,148, or 30% of the median U.S. household income,” the report noted. “Though still more than five percentage points above its long-run average, P&I costs have declined from 32% earlier this summer and significantly improved from their 35% peak in late 2023.”
The affordability news is the latest in a string of encouraging developments for homebuyers after the Federal Reserve cut interest rates last month, temporarily causing mortgage interest rates to dip to a three-year low. While they’ve since risen slightly in the following weeks, new developments could encourage buyers stuck on the sidelines in the high rate/high cost climate of recent years to re-enter the market. Below, we’ll break down three reasons why it could be worth acting now.
Start by seeing how low your current mortgage interest rate offers are here.
Why homebuyers should consider acting now
Not sure if now is the right time to relaunch your home hunt? Here are three timely reasons why it can be (in addition to the new affordability reality):
Additional interest rate cuts look likely
Around 92% and 80%. That’s what the CME Group’s FedWatch tool currently has Fed rate cuts listed for when the central bank meets again in October and December. In other words, there’s a high likelihood that two additional rate cuts will be issued before 2025 is over. This will make homebuying even more affordable than it already is.
However, buyers should understand that these expected rate cuts may not be reflected exactly on the days they are issued. Many lenders start pricing in these cuts in anticipation of formal Fed-rate cutting action. So you may not have to wait much longer to find a rate and term that fits your budget. In fact, you may already have ones available to you now.
Compare lenders, rates and terms online now to learn more.
There’s less competition right now
Increased housing affordability and lower rates make homebuying more accessible, but it could also make it markedly more competitive. As prices and rates come down, buyer competition is likely to increase, especially if both factors coincide next year, heading into the traditional spring homebuying season.
If you act now, however, just weeks before the holiday season, you’ll be able to better exploit lower prices and rates without having to deal with the competition and, potentially, bidding wars that will heat up as more buyers re-enter the market.
Your current home’s value will need to be accounted for
Not a first-time homebuyer? Do you need to leverage your current home’s existing equity to purchase a different one? Then it’s important to account for your home’s existing value now. If home prices are declining in parts of the country, as they have been recently, you may already have less to utilize as a down payment on your next home.
In other words, lower home values work both ways – you’ll pay less as a purchaser, but you’ll also sell your home for less than it may have been worth in recent years. You’ll need to balance both carefully, then, to make an affordable switch. And that may mean acting now, while both home values and rates are relatively affordable.
The bottom line
The extraordinarily cool mortgage rate climate of 2020 and 2021 is unlikely to reappear any time soon. But that doesn’t mean that homebuyers are totally out of options now, either. With home affordability the best it’s been since 2023, Fed rate cuts looming and moderate competition now, many may find this fall to be an advantageous time to take action. Consider your budget, current home value and long-term financial goals, then, to better inform your next steps.
Matt Richardson
