Mortgage rates slipped below 6% this week for the first time since 2022. Is this the big break homebuyers have been waiting for?
According to Freddie Mac's benchmark rate survey, the weekly average interest rate for a 30-year fixed-rate loan was 5.98% as of Feb. 26, its lowest level in more than three years. And although the difference between this week's average and that of a month ago isn't significant dollar-wise (working out to less than $35 on a $450,000 loan), it can have a psychological impact on both buyers and sellers.
In emailed comments, Mischa Fisher, Zillow's chief economist, tells Money that the decline could be meaningful for many buyers.
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"Rates below 6% will generate headlines and spark conversations, possibly prompting some buyers who gave up on their search to reengage," he says.
Sub-6% rates can also help ease the rate-lock anxiety, which has kept homeowners who don't want to give up their low mortgage rates from considering a move and listing their homes.
"Existing homeowners that have a current mortgage rate in the 4% range can now compare that to a rate that starts with a 5 on their next home, which can be more palatable when doing the mental math," Fisher says.
Adding more inventory to the housing market is an important part of improving affordability because it gives buyers more options, lessens competition and helps keep home prices stable.
Is now a good time to buy a house?
Mortgage rates can be unpredictable and change daily in response to a range of market conditions. There's no guarantee that today's 5%-plus rate will continue to decrease — or won't jump back above 6%.
Joel Berner, Realtor.com's senior economist, tells Money in an email that trying to time the market based on the rate can be fruitless. Instead, the decision to buy a home should be based on your goals and financial readiness.
"It's better to pull the trigger when you find a home that meets your needs and your budget, whenever that may be," Berner says.
That said, homebuying conditions are currently the best they've been in over three years. There are more homes for sale, mortgage rates are significantly lower than they were a year ago and home prices are holding steady.
According to a recent analysis from Zillow, homebuyers gained about $30,000 in buying power between January 2025 and the end of January this year, when the 30-year rate dropped from 6.96% to 6.10%. During that time, the typical mortgage payment decreased by 8.4%. This buying power is likely to have increased slightly as rates ticked lower in February.
Fisher points out, however, that affordability will vary widely depending on the market and the buyer, so not everyone will be able to take advantage of the rate dip.
"It's still a major challenge for a lot of households, but trending in the right direction," he says.
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