Mortgage Rates Drop to Their Lowest Level of the Year

If high mortgage rates have been keeping you from buying a home, now might be the time to reconsider. Mortgage rates have been on a steady decline recently, creating an opportunity for buyers to reenter the market.

According to Freddie Mac, mortgage rates have dropped for seven consecutive weeks, bringing the average weekly rate to its lowest point this year (see graph below):

While it may not seem like a huge change, it’s definitely significant. The drop from over 7% to the mid-6% range can make a big difference in how you approach buying a home—especially considering that forecasts predicted we wouldn’t reach this level until around Q3 of this year (see graph below):

Why Are Mortgage Rates Dropping?

Recent economic uncertainty is playing a key role in driving mortgage rates lower. According to Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA):

"Mortgage rates fell last week due to growing concerns about the economy and uncertainty surrounding new tariffs on imported goods. These factors led to the largest weekly drop in the 30-year fixed rate since November 2024."

This decline comes at the perfect time, offering some relief as we head into the spring market. However, mortgage rates can be unpredictable, so some volatility is expected. The current window of lower rates could be the perfect opportunity to maximize your buying power.

How Lower Rates Impact Your Buying Power

Even small shifts in mortgage rates can significantly affect your monthly payment. The chart below illustrates the difference in a monthly principal and interest payment on a $400K home loan—comparing the rate peak of 7.04% in mid-January to today’s lower rates (see below):

In just a few weeks, the expected monthly payment on a $400K loan has dropped by over $100—a meaningful savings. When making a major decision like buying a home, every dollar matters.

Keep in mind that economic shifts caused rates to fall faster than expected, but that trend could reverse, leading to volatility in the coming weeks and months. If you’ve been holding off in hopes of even lower rates, consider the opportunity available now while conditions are in your favor.

Bottom Line

Mortgage rates have declined, offering buyers some much-needed relief and a potential opportunity to enter the market with a lower monthly payment. If you’ve been holding off on purchasing a home, this could be the moment you’ve been waiting for.

Even a slight drop in rates can make homeownership more affordable, easing financial pressure and improving your overall buying power. Would a lower monthly payment make homeownership feel more within reach for you?

Now is the time to explore your options. Connect with a trusted real estate agent who can break down the numbers, help you understand how these rate changes impact your budget, and guide you toward making the best decision for your future.