Mortgage rates have fallen more than a quarter of a percentage point (0.25%) since mid-January. The average rate on a 30-year fixed mortgage is around 6.75%, down from 7.13% just six weeks ago, according to Bankrate data.
While that’s a welcome change that makes mortgage rates a little better, “it doesn’t make them especially low or attractive,” said Keith Gumbinger, vice president at HSH.com.
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Plus, even if lower rates are good for housing affordability, the reasons behind the recent dip — namely, a weaker job market and higher inflation — aren’t beneficial for most US households.
“The economic picture is shaky,” said Erin Sykes, founder of real estate company Sykes Properties.
Mounting concerns that the Trump administration’s tariff proposals, federal layoffs and tighter immigration policies could reduce economic growth have driven bond yields down. The popular 30-year fixed-rate mortgage is closely tied to the 10-year Treasury note, so lower bond yields translate to lower borrowing costs for homebuyers.
Housing giant Fannie Mae expects average mortgage rates to remain above 6.5% for most of the year. But if new data points to longterm economic distress, mortgage rates could hit that target earlier than expected, according to Gumbinger. “There’s a great bit of uncertainty in the outlook at the moment,” he said.
With the spring homebuying season fast approaching, prospective homebuyers are left at a familiar crossroads: Jump into the market now or stay on the sidelines?
