Mortgage Rates Dip Below 6%

Prior to increased global tensions, mortgage rates hit a milestone as the average 30-year fixed-rate dropped to 5.98% last week—the first time the metric has dipped below 6% since September 2022.

This slight decline from 6.01% the prior week (and 6.76% a year ago), paired with rising inventory, is expected to pull buyers off the sidelines if the lower mortgage rates persist or continue to decline. Additionally, Freddie Mac reports that refinancing applications have already doubled year-over-year.

A resurgence in housing activity can add fuel to the broader economy. Refinancing frees up thousands in annual interest payments for consumer spending, while increased home sales drive job growth for supporting industries.

As an example, Mohawk Industries’ CEO was recently quoted in The Wall Street Journal: “U.S. consumers [spend] an estimated five times as much on remodeling their flooring in the first year after buying a home than non-movers.”

While these lower rates are a welcome reprieve for housing, the developing unrest in the Middle East remains a significant wildcard. We expect to see the first impacts reflected in energy costs at the pump, but the long-term effect on inflation and bond yields—and by extension, mortgage rates—remains to be seen.

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