When the headlines say that mortgage rates are the lowest in months, that doesn’t always mean the drop was significant enough to shake up the housing market.
Despite the recent decline in average 30-year fixed mortgage rates — from above 7% to around 6.9%, according to Bankrate data — prospective homebuyers are playing the waiting game. For the week ending Feb. 14, mortgage applications declined to the lowest level since the start of 2025, dipping by 6.6%from the week prior, according to the Mortgage Bankers Association.
Buyers are still feeling constraints of low housing affordability, said Jason Walter, a member of CNET Money’s Expert Review Board who has over a decade of experience as a real estate agent. “US home prices are 3-5% higher than last year, and average 30-year fixed mortgage rates have been stuck near 7% for about two months,” said Walter.
While experts predict rates to move lower throughout 2025, it’s not going to be a dramatic decline. Fannie Mae expects average 30-year fixed mortgage rates to remain above 6.5% for most of the year.
Mortgage rates aside, prospective homebuyers are also contending with a long-standing housing shortage, high home prices and a loss of purchasing power due to inflation. Experts say many of the Trump administration’s policies, such as tariffs, could cripple housing affordability even further, putting upward pressure on interest rates and the cost of building materials, like lumber, used to build new homes.
