Falling Mortgage Rates Could Attract More Home Buyers

The average 30-year fixed mortgage rate fell to 6.63% this week, according to Freddie Mac, marking the biggest one-week drop since mid-September and the lowest rate since mid-December.

Approximately 17.2% of U.S. homeowners have mortgage interest rates of 6% or higher.

This decline could encourage buyers as the typically busy spring homebuying season begins, Shaina Mishkin and Janet H. Cho reported for Barron’s Daily.

Lower rates increase prospective home buyers’ purchasing power and provide a strong incentive to act, said Freddie Mac Chief Economist Sam Khater. The share of mortgage applications from homeowners seeking to refinance rose to nearly 44%, the highest since mid-December.

Pending home sales, as measured by Redfin Brokerage in the four weeks ending March 2, dropped 6.4% from a year earlier. However, mortgage applications increased by a seasonally adjusted 9% from the previous week and were 2% higher than in 2024.

For a mortgage on a median-priced $400,000 home with a 10% down payment, a half-percentage-point rate drop—from 7% to 6.5%—would save the buyer about $120 per month, said Lisa Sturtevant, Chief Economist at Bright MLS.

According to a Redfin analysis of federal government data, approximately 17.2% of U.S. homeowners have mortgage interest rates of 6% or higher. About 83% of homeowners have mortgage rates below 6%, while 21% have rates under 3%.