The daily average 30-year fixed-mortgage rate dropped to 5.99 percent on Monday, the lowest level in more than two years with the exception of a few hours on January 9, when they were at the same level, according to real-estate site Redfin.
It is a further decline from the dip already reported by Freddie Mac earlier this week, when the company put the average 30-year fixed-mortgage rate at 6.01 percent on February 19—the lowest level since September 2022.
Why Are Mortgage Rates Coming Down?
While mortgage rates are still double their pandemic-era lows, this is a movement in the right direction for would-be buyers burdened by higher housing costs, as rates had not fallen below the 6 percent mark since September 2022.
It comes after other pieces of good news for buyers this month, including home price growth losing steam—with the median sale price up by only 1 percent compared with 4 percent a year earlier—better-than-expected employment figures, and a surplus of sellers which is shifting the market in their favor.
The recent decline in mortgage rates has, in fact, followed a slide in the 10-year Treasury yield, which hit its lowest point since last November after last week’s softer-than-expected Consumer Price Index (CPI) reading and a relatively optimistic jobs report.
“Mortgage rates are coming down because U.S. Treasury yields are falling as investors park their money in bond markets amid tariff uncertainty and AI jitters,” Redfin data journalist Dana Anderson wrote in a report published on Monday.
What Does This Decline Mean for Homebuyers?
Homebuyers have been struggling for years with historically elevated mortgage rates and rising housing costs, including home prices, property taxes, and homeowners’ insurance premiums. These ongoing affordability challenges led to a drop in demand for housing last year, when growing economic uncertainty also made would-be buyers more cautious, and a much-needed slowdown in home price growth.
This slowdown, however, has not been significant enough to bring buyers back into the market. In the largely frozen U.S. market, both experts and would-be buyers are carefully looking at any movement in mortgage rates to see whether it would bring a significant improvement in affordability.
With Monday’s average mortgage rate, a buyer on a $3,000 monthly budget could afford a $479,750 home, according to Redfin’s calculations. That is a higher sum than the typical U.S. home fetched on the market last month, according to the latest Redfin data, at a median sale price of $422,921, up 1.1 percent from a year earlier.
Crucially, this recent decline in mortgage rates has brought buyers a gain of $8,000 in purchasing power since the beginning of the year and of $33,750 over the last year, Redfin wrote.
At the start of the year, when rates were still hovering around 6.2 percent, they could have only afforded a $471,750 home. A year ago, when the average mortgage rate was 6.9 percent, they could have bought a $466,000 home.
Americans are also paying lower monthly payments on the median-priced U.S. home as a result of this decline, for an average of $2,790. Two months ago, when rates were at 6.2 percent, the monthly payment would have been $2,834; a year ago, with an average 6.9 percent rate, it would have been $2,992.
But while this decline slightly improves affordability in the U.S. housing market, many prospective buyers are still struggling with historically high prices. They must now earn $111,000 to afford a typical U.S. home, according to Redfin, higher than the median household income, but down 4 percent from last year.
“Lower rates should improve affordability and bring out more buyers…But it is clear that there are still other things on the minds of prospective homebuyers,” Bright MLS chief economist Lisa Sturtevant said in a statement shared with Newsweek.
“It is not just about rates for homebuyers. Inventory is still limited in many local markets, particularly in the Midwest and Northeast,” she added. “Consumer confidence is low, as many individuals and families are dealing with higher prices for everything from groceries to cars. The weather also held back prospective homebuyers, as snow and chilly weather has impacted markets as far south as Florida.”
What Can Homebuyers and Homeowners Expect This Spring?
In their 2026 forecasts, a majority of housing experts said they expect mortgage rates to continue sliding down this year but remain hovering around the 6 percent mark through the year, unless something truly surprising occurs.
This is good news for both prospective homebuyers, who are getting more affordable borrowing options, and homeowners, who are seeing their financial positions strengthened by lower rates, according to Freddie Mac.
Sturtevant believes that, assuming mortgage rates remain at the current levels or continue sliding down, “we should see more buyers this spring as both inventory and the weather improves.”
Realtor.com senior economist Jake Krimmel agreed, saying that “there is a chance” mortgage rates would be “nearly a full percentage point” this spring compared with last year, a drop which “would meaningfully boost purchasing power.”
But that does not necessarily mean that the sluggish U.S. housing market will suddenly see buyers rush off the sidelines of the market. As Sturtevant also mentioned, low inventory levels in parts of the country and a slowdown in new construction could hinder a significant boost in transactions.
“New construction in 2025 finished behind 2024, and inventory growth has clearly lost steam,” Krimmel said in a statement to Newsweek. “Without a significant return of supply through the easing of the mortgage ‘lock-in effect,’ lower rates may simply reignite competition and spike prices, erasing the affordability relief buyers are hoping for.”
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