A Long-Awaited Drop Hits Milestone Levels (Image Credits: Images.fastcompany.com)
The average rate for a 30-year fixed mortgage in the United States fell below 6% this week, providing relief to home seekers amid the onset of the spring buying season.
A Long-Awaited Drop Hits Milestone Levels
Freddie Mac reported Thursday that the benchmark 30-year fixed mortgage rate declined to 5.98%, marking the first time it dipped under 6% since late 2022.
This represented a slight decrease from 6.01% the previous week and stood well below the 6.76% average from one year earlier. The rate had lingered near 6% throughout much of the year, with this marking the third consecutive weekly decline. It now approaches the 5.89% low recorded on September 8, 2022. Lower rates like these ease monthly payments for qualified borrowers, potentially unlocking pent-up demand.
What Drove the Latest Decline?
Several economic forces shaped this downward movement in mortgage rates. Lenders often track the 10-year Treasury yield, which guides home loan pricing and stood at 4.02% midday Thursday, down from 4.07% a week prior.
Federal Reserve interest rate policies play a central role, alongside bond investors’ views on inflation and growth prospects. These elements have pushed rates lower over recent months. Still, the trajectory remains sensitive to broader economic shifts.
Housing Market Struggles Persist Despite Momentum
Home sales showed some improvement in the final four months of 2025, thanks to gradually easing rates. Yet the sector has endured a prolonged downturn since rates surged from pandemic lows in 2022.
Sales of existing homes hit 30-year lows throughout last year. Even with more favorable rates this year, January figures plummeted to the slowest pace in over two years – the largest monthly drop in nearly four years. High prices and limited inventory continue to deter many buyers.
| Period | 30-Year Fixed Rate |
|---|---|
| This week | 5.98% |
| Last week | 6.01% |
| One year ago | 6.76% |
| Sept. 2022 low | 5.89% |
Spring Season Could See Renewed Activity
Prospective buyers who qualify at current levels may find this timing ideal as March typically ignites the spring market. Economists anticipate increased participation if rates hold steady.
“Assuming rates stay below 6%, buyers and sellers are going to start getting back into the market,” said Lisa Sturtevant, chief economist at Bright MLS. “March is when the spring homebuying season typically begins to ramp up and with rates at a three-and-a-half year low, it could be a barn burner of a spring homebuying season.”
Key factors that could fuel a rebound include:
- Sustained sub-6% rates reducing affordability barriers.
- Seasonal uptick in listings as sellers respond to buyer interest.
- Improving consumer confidence amid economic stability.
- Potential wage growth supporting higher purchase power.
- Regional variations where inventory shortages ease.
Key Takeaways:
- Rates at 5.98% offer the lowest level since September 2022.
- Treasury yields and Fed policies remain primary drivers.
- Spring could bring stronger sales if trends hold.
This rate relief arrives at a pivotal moment, potentially reigniting a housing market long mired in caution. Buyers face a narrow window to act before any reversals. What do you think – will lower rates spark a true recovery? Tell us in the comments.