Mortgage rates have fallen to their lowest level of 2025, with the average 30-year fixed mortgage now at 6.19%, down from over 7% at the start of the year, according to Freddie Mac. This decline is contributing to increased homebuyer activity, as softer home prices and lower mortgage rates improve affordability. Despite market optimism, most potential buyers are hesitant to purchase, expecting rates to decrease further, which delays their entry into the housing market. A CNBC Housing Market Survey indicates that nearly three-quarters of real estate agents report their buyers believe rates will fall more, leading to a standoff where buyers wait on the sidelines. Home prices are softening across many major areas, with a 1.4% discount on homes in September—the largest since 2019—indicating a shift towards a more buyer-friendly market. Home sales increased in September, driven by expectations of lower rates, but inventory remains tight, especially for affordable properties. Sellers are cautious, with many reducing prices or delisting homes, while buyers are using interest rate buy-downs and adjustable-rate mortgages to offset higher prices. Market analysts predict mortgage rates will remain within the 6%-7% range through 2026, influenced by Federal Reserve policies and economic conditions. Overall, the housing market is showing signs of increased activity and improved affordability, but uncertainties about future rate movements continue to influence buyer and seller behaviors.