U.S. Mortgage Rates Decline to Lowest Level in Over Three Years

The average 30-year fixed mortgage rate in the United States has decreased to 6.06%, down from 6.16% the previous week, according to Freddie Mac. This marks the lowest level since September 2022, when the rate was 6.02%. One year ago, the rate stood at 7.04%. The 15-year fixed-rate mortgage also declined to 5.38% from 5.46% last week; a year ago, it was 6.27%.

The reduction in mortgage rates enhances homebuyers' purchasing power, offering some relief amid a housing market that has experienced a prolonged slump due to high prices and elevated borrowing costs. Despite the lower rates, the market remains sluggish, with existing home sales in 2025 stuck at a 30-year low of 4.06 million units.

The Federal Reserve began cutting interest rates in September 2025, contributing to the decline in mortgage rates. Additionally, President Donald Trump's recent announcement of a $200 billion mortgage bond purchase aims to further reduce rates.

These developments have led to a surge in refinancing activity, with applications increasing by 40% last week compared to the previous week, accounting for 60% of all home loan applications. Applications for loans to purchase homes also rose by 16%.

Economists anticipate that mortgage rates will continue to ease throughout the year, though forecasts suggest the average rate on a 30-year mortgage will remain above 6%, approximately double the rates seen six years ago.