Mortgage Rates Reach Yearly Lows

Good news for homeowners and buyers in Naperville and across the western Chicago suburbs — mortgage rates are hovering near their lowest levels in about a year, and local homeowners are taking notice.

According to the Mortgage Bankers Association (MBA), refinance applications jumped an impressive 111% in the week ending October 24 compared to the same week last year. Even compared to the previous week, refinance activity was up 9%, as many homeowners took advantage of lower rates to save money or shorten their loan terms.

As of Thursday, Freddie Mac reported the average 30-year fixed-rate mortgage at 6.19%, while the 15-year fixed-rate mortgage — a popular choice for refinancers — averaged 5.44%. This marks the fourth consecutive week of declines, sparking renewed interest among borrowers.

Joel Kan, the MBA’s deputy chief economist, explained that borrowers with larger loans are especially quick to act when rates move.

“Borrowers with larger loan sizes continue to be sensitive to rate movements,” he said in a statement.

The average refinance loan size was $393,300, reflecting the continued strength of higher-end housing markets — something we certainly see here in Naperville, where the median home price often hovers around the half-million mark.

And it’s not just refinances that are increasing. Purchase applications for new mortgages are up 20% compared to this time last year, according to MBA data.

A Positive Sign for the Naperville Real Estate Market

Economists view this upward trend in mortgage demand as a positive indicator for the broader housing market. The team at Wells Fargo noted that this uptick could mean continued improvement in both new and existing home sales.

“The improvement suggests that new and existing home sales, which have both grown modestly recently, should continue to trend in a positive direction,” they wrote in commentary published last week.

For local buyers and sellers, this is encouraging. Lower mortgage rates tend to boost buyer confidence, which can lead to more showings, faster sales, and a healthier real estate market overall.

Here in Naperville, we’re already seeing more buyer activity, with homes selling more quickly and multiple-offer situations returning in certain price ranges. While affordability remains a challenge in some areas, the combination of easing rates and Naperville’s strong demand — fueled by top-rated schools, community amenities, and convenient access to Chicago — helps keep our market resilient.

The Broader Economic Picture

Of course, mortgage rates don’t exist in a vacuum. The overall U.S. economy remains somewhat of a “mixed bag,” according to Wells Fargo economists. Factors like inflation, employment trends, and consumer spending can all influence where rates go from here.

Then there’s the Federal Reserve. The Fed is widely expected to lower its benchmark interest rate this week — but that doesn’t automatically mean mortgage rates will fall further.

“[Mortgage] rates are already low today. The Fed rate cut won’t make them go any lower,” explained Matthew Graham, chief operating officer of Mortgage News Daily, in a recent blog post. “Other info from the Fed could make them go either higher or lower, depending on what’s said.”

In other words, while the Fed’s decisions shape the overall economy, mortgage rates are more sensitive to the Fed’s outlook and market reactions than the actual rate cut itself.

What This Means for Naperville Homebuyers and Homeowners

If you’ve been waiting for the right time to make a move, this might be your opportunity. Mortgage rates haven’t been this low in nearly a year, and that’s opening doors for both buyers and homeowners:

For Homeowners

If you purchased or refinanced your home when rates were around 7%, now could be a great time to explore refinancing. Even a half-point reduction can save hundreds per month — or allow you to pay off your home sooner.

For Homebuyers

Lower rates can slightly boost your purchasing power, helping you qualify for a higher loan amount or reduce your monthly payments. That’s especially helpful in sought-after markets like Naperville, Oswego, and Plainfield, where well-priced homes are still drawing competition.

Still, experts caution that while activity is improving, we’re not likely to see a major surge in home sales just yet.

“The mortgage applications for purchase index does not appear to be accelerating sharply and is still low relative to the high levels registered after the pandemic,” the Wells Fargo report noted. “This suggests a significant near-term break-out in home sales is unlikely as challenging affordability conditions and a less-robust macroeconomic backdrop continue to limit activity.”

Even so, Naperville continues to outperform many other suburban markets — thanks to its strong schools, desirable neighborhoods, and stable job base.

Bottom Line: Opportunity Is Knocking

Mortgage rates are sitting near year-long lows, and that’s great news for anyone thinking about buying or refinancing. Whether you’re considering a move across town, buying your first home, or exploring refinance options to save money, now is a smart time to check your numbers.

If you’d like to understand what these rate changes mean for your situation, I’d be happy to connect you with trusted local lenders or help you run the numbers on your next move.

📞 Let’s talk about your options in today’s market.
Whether you’re buying, selling, or simply curious about what your home is worth, I’m here to help you make an informed decision in Naperville’s ever-evolving real estate landscape.