Mortgage Interest Rates Today: Mortgage Rates Dip Slightly to 6.27% as Investors Keep Eye on Trade War With China

Mortgage rates ticked down on Thursday as investors continued following the latest developments in the unfolding U.S.-China trade war, with President Donald Trump threatening to impose a new 100% tariff on Chinese imports. 

The average rate on 30-year fixed home loans decreased to 6.27% for the week ending Oct. 16, down from 6.3% the week before, according to Freddie Mac. Rates averaged 6.44% during the same period in 2024.

"Mortgage rates inched down this week and have held relatively steady over the past several weeks,” says Sam Khater, Freddie Mac's chief economist. "Importantly, homeowners have noticed these consistently lower rates, driving an uptick in refinance activity. Combined with increased housing inventory and slower house price growth, these rates also are creating a more favorable environment for those looking to buy a home."

Last week, Trump said the U.S. will impose triple-digit levies on Chinese goods beginning on Nov. 1 in retaliation for Beijing's plan to introduce new export controls on rare earth minerals used in the production of semiconductors, electronics, and vehicles, accordign to Yahoo Finance. 

On Monday, Trump suggested that a de-escalation of tensions between China and the U.S. was possible, writing on his Truth Social account: "Don't worry about China, it will all be fine! Highly respected President Xi just had a bad moment."

At the same time, Treasury Secretary Scott Bessent said in a Fox News interview that Trump was still planning to meet with China’s leader this month and hinted that an extension of the tariff pause between the two countries was not off the table. 

Meanwhile, the government shutdown has entered its 15th day, creating an economic data drought by depriving the Federal Reserve of crucial information on unemployment and retail sales.  

On Tuesday, Fed Chair Jerome Powell expressed concern about rising downside risks to employment in a softer labor market, but also warned that the slow trickling down of tariffs to consumers could begin to resemble persistent inflation. 

Still, Powell noted that as risks become more balanced, monetary policy should gradually move toward a more neutral stance—hinting at the possibility of further rate cuts at the upcoming Federal Open Market (FOMC) meeting on Oct. 28–29. 

"While CPI data is expected to be released before the October FOMC meeting, even if the shutdown continues, the prolonged disruption could further complicate the Fed’s decision-making by delaying other key economic reports," says Realtor.com® senior economist Jiayi Xu.

Even with mortgage interest rates trending down toward 6%, recent survey data shows that home purchase sentiment has remained flat. Nationwide, buying power has declined sharply, as home prices and mortgage rates continue to outpace income growth. 

"As a result, substantial wage gains and improved financial stability will be essential to boost purchase sentiment," says Xu. "However, broader uncertainty from the ongoing government shutdown may further weigh on sentiment—especially in markets with a higher share of federal workers and contractors, who are facing financial strain and concerns over potential layoffs."

How mortgage rates are calculated

Mortgage rates are determined by a delicate calculus that factors in the state of the economy and an individual’s financial health. They are most closely linked to the 10-year Treasury bond yield, which reflects broader market trends, like economic growth and inflation expectations. Lenders reference this benchmark before adding their own margin to cover operational costs, risks, and profit.

When the economy flashes warning signs of rising inflation, Treasury yields typically increase, prompting mortgage rates to go up. Conversely, signs of falling inflation or weakness in the labor market usually send Treasury yields lower, causing mortgage rates to fall.

The mortgage rates you’re offered by a lender, however, go beyond these benchmarks and take some of your personal factors into account.

Your lender will closely scrutinize your financial health—including your credit score, loan amount, property type, size of down payment, and loan term—to determine your risk. Those with stronger financial profiles are deemed as lower risk and typically receive lower rates, while borrowers perceived as higher risk get higher rates.

How your credit score affects your mortgage

Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you'll receive. The higher the credit score, the lower the interest rate you'll qualify for.

The credit score you need will vary depending on the type of loan. A score of 620 is a "fair" rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.

Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates.

Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. They want to make sure you're able to pay back the loan.