Mortgage Rates Hit Lowest Point So Far This Year

Mortgage Rates Hit Lowest Point So Far This Year

If you’ve been holding off on buying a home because of high mortgage rates, it may be time to reconsider.

Mortgage rates have been trending down for seven consecutive weeks, according to Freddie Mac. The average weekly rate is now at its lowest point this year, creating a potential window of opportunity for buyers.

Although it may not seem like a big change, the drop from over 7% to the mid-6% range is significant. This shift could positively impact your homebuying outlook, especially since experts predicted rates wouldn’t reach this level until around Q3 of this year.

Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA), explains that recent economic uncertainty is contributing to the decline in mortgage rates.

"Mortgage rates declined last week on souring consumer sentiment regarding the economy and increasing uncertainty over the impact of new tariffs levied on imported goods into the U.S. Those factors resulted in the largest weekly decline in the 30-year fixed rate since November 2024."

The recent decline in mortgage rates comes at a great time, offering some relief as the spring market approaches. Keep in mind that mortgage rates can change quickly, so this current window of lower rates could be the ideal moment to maximize your buying power.

What Lower Rates Mean for Your Buying Power

Even a small shift in mortgage rates can significantly impact your monthly payment. For example, the chart below compares the monthly payment (principal and interest) on a $400K home loan at the year’s high rate of 7.04% in mid-January versus the current lower rate.

In just weeks, the expected payment on a $400K loan has dropped by over $100 per month — a meaningful savings. Economic shifts brought rates down faster than expected, but that could change. If you're waiting for rates to drop more, consider taking advantage of this current window if you're ready to buy.

Bottom Line

Mortgage rates have dipped, giving buyers more breathing room. If you've been waiting for better rates, this could be your chance. Would a lower monthly payment make buying a home more doable? Let's crunch the numbers and see!