Mortgage Rates Are Dropping—But Will It Last?

Good news for homebuyers! Mortgage rates have dropped for the fourth week in a row, offering a welcome break from the highs we saw earlier this year. But the big question remains: Will this trend continue? Let’s dive into what’s happening and what it could mean for buyers and sellers this spring.

📉 Mortgage Rates Hit Their Lowest Level of 2025 (So Far!)

As of this week, the 30-year fixed-rate mortgage averages 6.87%, down slightly from last week’s 6.89%, according to Freddie Mac. While still higher than some might hope, this marks the lowest mortgage rate we’ve seen so far in 2025.

Jessica Lautz, Deputy Chief Economist at the National Association of REALTORS® (NAR), sees this as a positive shift:

“This timing is encouraging as home buyers begin to enter the early spring housing market, and mortgage applications have also risen. If housing inventory continues to grow, buyers will be in a better position compared to previous years.”

What does this mean for buyers?
Lower rates make homes more affordable, bringing more buyers into the market just in time for the busy spring season.

💰 What Do These Rates Mean for Monthly Payments?

If you’re planning to buy a $400,000 home, here’s what your monthly mortgage payment might look like at the current 6.87% rate:

✔️ 20% Down Payment → $2,101/month
✔️ 10% Down Payment → $2,364/month

Of course, home prices are still high—NAR reports that the median home price reached a record $407,500 in 2024—so affordability remains a challenge.

📊 Will Mortgage Rates Continue to Fall?

That’s the big question! While recent declines are great news, several factors could prevent rates from dropping further:

📌 Inflation is still high – The Consumer Price Index rose to 3% in January, which is keeping mortgage rates elevated.
📌 The Federal Reserve is holding firm – The Fed has made it clear that it won’t lower its benchmark interest rate until inflation drops closer to 2%.
📌 The 10-Year Treasury Yield matters more – Mortgage rates tend to follow the 10-year Treasury yield, not just the Fed’s decisions. And lately, those yields have stayed high.

That said, there’s some hope on the horizon. NAR’s Chief Economist, Lawrence Yun, notes that housing inflation is slowing, which could help push mortgage rates lower in the coming months.

“Perhaps some temporary oversupply in new apartment units will help restrain this component in the coming months and ultimately lead to lower inflation—and, importantly, lower mortgage rates.”

For now, experts predict mortgage rates will average between 6% and 6.5% throughout 2025, though future drops will depend on inflation and economic trends.

🏡 What Should Buyers and Sellers Do Now?

📌 For Buyers: If rates continue to decline, waiting could pay off—but if you find the right home, locking in today’s rate might be the best move. Remember, you can always refinance later if rates drop further!

📌 For Sellers: Lower rates could bring more buyers into the market, increasing demand for your home. If you’re thinking about selling, this spring could be a great time to list!

Want to talk strategy? Let’s connect! Whether you’re buying, selling, or just keeping an eye on the market, I’m here to help you navigate the changes and find the best opportunity for you. 🚪🔑✨


Original article: Mortgage Rates Are Falling, But Will It Last?

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