Mortgage rates have experienced a notable decline this week, reaching their lowest levels in over a year, according to the latest report from mortgage buyer Freddie Mac. The average rate on a benchmark 30-year fixed mortgage has dropped to 6.19%, down from 6.27% recorded the previous week. This marks a significant decline from the average rate of 6.54% seen one year earlier.
Sam Khater, Freddie Mac’s chief economist, noted that at the beginning of 2025, the rate for a 30-year fixed mortgage had exceeded 7%. The current rate is nearly a full percentage point lower, which has spurred a surge in refinancing activity, making up more than half of the mortgage market transactions for the sixth consecutive week.
In addition, the average rate for a 15-year fixed mortgage has similarly decreased to 5.44%, down from 5.52% last week, and a year ago, it averaged 5.71%. This consistent decrease aligns with market expectations of a forthcoming rate cut by the Federal Reserve, especially amid lower Treasury yields and ongoing uncertainty linked to the government shutdown.
Realtor.com Senior Economist Jake Krimmel pointed out that while the recent decline presents an opportunity for buyers in the housing market, further decreases in mortgage rates may be limited. The forthcoming Federal Reserve cut is already being factored into current market expectations, coupled with concerns about budget deficits and persistent inflation that may restrict how much lower rates could fall.
Krimmel also emphasized that the easing of rates arrives during a favorable “best time to buy” season, providing both buyers and those looking to refinance with valuable savings. As housing inventory increases, buyers are gaining more leverage in negotiations. Despite ongoing affordability challenges, borrowers have significant control over their mortgage rates through careful choices regarding credit scores, loan types, and down payments.
The current shift in mortgage rates represents a crucial moment for prospective homebuyers, allowing for savings and enhanced negotiating power, marking a potential resurgence in the housing market amid previous uncertainties.