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If you’ve been holding off on buying a home because of high mortgage rates, you might want to take another look at the market. That’s because mortgage rates have been trending down lately, giving you a chance to jump back in.
According to data from Freddie Mac, mortgage rates have been declining for seven straight weeks. The average weekly rate is now at the lowest level so far this year (see graph below):
While that may not sound like a significant shift, it is noteworthy. The meaningful drop from over 7% to the mid-6s can change your mindset when buying a home. Especially when the forecasts said we wouldn’t hit this number until roughly Q3 of this year (see graph below):
Why Are Rates Coming Down?
According to Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA), recent economic uncertainty is playing a role in pushing rates lower:
“Mortgage rates declined last week on souring consumer sentiment regarding the economy and increasing uncertainty over the impact of new tariffs levied on imported goods into the U.S. Those factors resulted in the largest weekly decline in the 30-year fixed rate since November 2024.”
The timing of this recent decline is excellent because it gives you a little relief going into the spring market. Remember, mortgage rates can be a quickly moving target, so you should expect some volatility. But the window you have as they’re coming down right now might be the sweet spot for your purchasing power.
What Lower Rates Mean for Your Buying Power
Even small changes in rates can make a difference to your monthly payment. Here’s how the math shakes out. The chart below shows what a monthly payment (principal and interest) would look like on a $400K home loan if you purchased a house when rates were 7.04% back in mid-January (this year’s mortgage rate high), versus what it could look like if you buy a home now (see below):
In just weeks, the anticipated payment on a $400K loan has come down by over $100 monthly. That’s a significant savings. When you’re making a decision as big as buying a home, every bit counts.
Just remember, shifts in the economy drove rates down faster than expected. But that can change, making rates volatile in the days and months ahead. So, if you’re waiting for rates to fall further before you buy, think hard about the current window of opportunity if you’re ready to act.
Bottom Line
Mortgage rates have dipped, giving buyers a bit more immediate breathing room. This could be your window if you’ve been waiting for rates to ease before jumping in.
Would a lower monthly payment make buying a home feel more doable? Let’s break down the numbers and find out.
