The average U.S. 30-year fixed mortgage rate fell to 5.98%, its lowest since September 2022 and the first time below 6% in 3.5 years, according to Freddie Mac.
The rate dipped from 6.01% the previous week and was 6.76% at the same point last year.
Driving the news: The decline was triggered by a drop in the 10-year Treasury yield, itself a response to the U.S. Supreme Court overturning former President Trump’s broad tariffs.
- Trump ordered the Federal Housing Finance Agency to buy $200 billion in bonds from Fannie Mae and Freddie Mac to reduce home loan costs.
Zoom in: While 30-year rates fell, the 15-year fixed average increased to 5.44% from 5.35% last week.
- Economists remain skeptical that lower mortgage rates alone will improve home affordability due to persistent low housing supply.
- Many homeowners are reluctant to sell, locked in by existing mortgages under 5%, keeping the inventory of homes for sale below pre-pandemic levels.
- Home price growth remains steady, with a 1.8% annual rise through December.
What we’re watching: Lower rates might push some sellers to the market and entice sidelined buyers, with experts noting that the psychological impact of sub-6% rates could spur renewed activity.
