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mortgage rates Has reached its lowest level in 14 months.
Freddie Mac’s Primary Mortgage Survey, an ongoing data analysis that tracks average rates for mortgages, revealed Thursday that rates 30-Year Fixed Rate Home Loan has fallen so far 6.18 percentThis is the first time since October 2024 that they have fallen below 6.2 percent.
“The average 30-year fixed-rate mortgage declined further this week,” said Sam Khater, chief economist at Freddie Mac. statement“Falling rates provide a timely and welcome gift to interested home buyers,”
If you’re a prospective or existing homeowner, you may be wondering about two things as rates drop: Why are they falling?And what should you do about it?
Why are mortgage rates falling?
Direct and indirect factors affect mortgage rates, so there’s no single reason why they’ve fallen from about 7 percent at the beginning of the year to 6.2 percent now.
In general, home rates fall around this time of year as home sales slow and lower rates encourage buyers to get a mortgage and purchase a home. This is especially important now, as home-sales rates hit an all-time low in the housing market in November three decadesAccording to the National Association of Realtors.
Lawrence Yun, the association’s chief economist, said low home values are another reason homeowners aren’t selling, slowing the market and leading to low rates.
Steve Hill, broker associate at mortgage firm SBC Lending, told Independent In addition to Fed rate drops, lenders competing with each other have helped drive down mortgage rates.
What do low rates mean for consumers?
Generally speaking, low rates make it affordable to buy a home, but can also inspire more purchases, which increases demand and drives up prices.
However, the average selling price of a home remains stable In the first six months of the year, according to the Federal Reserve.
That means the right time to buy a home could come soon, Hill said — it’s also possible that mortgage rates could fall below 6 percent due to President Donald Trump selecting a new chair for the Federal Reserve.
“I think it will be spring or summer before rates drop to level 5,” he said. “Personally, I think rates will float in this range until we get a new Fed Chairman in May 2026. Rates will probably start falling 4-6 weeks before then… This would be a good time to lock in [in a mortgage rate]Because anticipation and excitement will be at their peak. And that’s when rates were best in 2025 – in the two weeks before the Fed rate cut.