This is the most exciting news to hit the national housing market in years. It had been predicted that rates would drop to 6% in 2026, but I’m not sure anyone expected it to happen this early in the year. This early decline in rates could set the stage for sub-6% rates later this year.
Already, we are seeing increased buyer interest, and mortgage lenders are reporting improved purchase activity and, for the first time in years, a surge in refinance business.
If you are currently renting, now is the time to compare buying versus renting. Rents remain high, and with the new lower mortgage rates and some of the great loan programs available today, you might be surprised at how much sense purchasing a home now can make.
The following is an article from the National Association of Realtors addressing the new mortgage rates.
Mortgage rates hit their lowest since 2022, unleashing a wave of millions of potential buyers who may now be able to afford homeownership.
Agents and home buyers, take note: The 30-year fixed-rate mortgage averaged 5.98% this week—its lowest point in three-and-a-half years. The drop could potentially unlock millions of new buyers who had been sidelined by affordability constraints when rates hovered around 7% just over a year ago.
“Mortgage rates falling below 6% is a big psychological and financial milestone—the first time we have seen that since September 2022,” says Nadia Evangelou, principal economist and director of real estate research at the National Association of REALTORS®. “That's a confidence trigger for buyers, especially those who have been holding out for rates to start with a five again.”
Evangelou notes that on a $400,000 home, today's rates bring the monthly mortgage payment down to about $1,910. “That's a significant improvement from a year ago and puts about $2,000 back into a buyer's pocket annually,” Evangelou says.
Sam Khater, Freddie Mac’s chief economist, also called the rate move into the 5% range a milestone—even more significant than last week’s news-triggering headline of 6.01% rates.
“This rate, combined with improving availability of homes for sale, is meaningful and will drive more potential buyers into the market for the spring home buying season,” Khater says.
Where the Most New Buyers Could Emerge
An analysis of National Association of REALTORS®’ Metro Market Dashboard shows that an additional 5.5 million households now stand to qualify for a mortgage—households that couldn’t qualify when rates were near 7%. That includes 1.6 million renters who could become first-time buyers.
Galand Haas
Haas Team Real Estate
541.349.2620