Mortgage Rates Drop to Lowest Since February 2023

Mortgage rates have decreased to their lowest levels since February 2023. This comes as President Donald Trump advances his initiative aimed at making homeownership more affordable.

According to Freddie Mac’s latest Primary Mortgage Market Study released on Thursday, while mortgage prices slightly increased this week, they are still at a three-year low. The average interest rate for a 30-year fixed mortgage rose to 6.09% from 6.06% last week. If you look back a year ago, the average rate was significantly higher at 6.96%.

Surge in Home Delistings

Interestingly, as sellers find it challenging to achieve desired prices, many are pulling their homes off the market. Sam Cater, the chief economist at Freddie Mac, noted that more homebuyers are entering the market, spurred by an improving economy. He mentioned, “The average price of a 30-year fixed-rate mortgage is nearly a full percentage point lower than it was last year.” He also encouraged buyers to shop around for better rates, emphasizing that it could save them thousands of dollars.

Market Factors That Influence Mortgage Rates

Various factors, such as the Federal Reserve and global politics, impact mortgage rates. Although the Fed’s interest rate decisions do not directly change mortgage rates, there’s a close connection with the 10-year Treasury yield, which was around 4.25% on Thursday afternoon. Additionally, the average interest rate for a 15-year fixed mortgage increased to 5.44% from 5.38% the previous week.

Possible Future Relief for Homebuyers

Looking ahead, Anthony Smith, a senior economist at Realtor.com, discussed the potential relief for buyers in 2026, especially as recent policy changes come into play. One of those changes is President Trump’s announcement involving Fannie Mae and Freddie Mac, which will purchase $200 billion in mortgage-backed securities, contributing to the fluctuations in interest rates. However, Smith noted that uncertainty about how these policies will be implemented might dampen their overall effectiveness.

“While this announcement has played a role in decreasing interest rates, the uncertainty surrounding its rollout could limit its actual impact,” Smith explained. He pointed out that a separate executive order is aimed at restricting institutional investors in the housing market, yet its short-term effects might be minimal and focused on a few urban centers where enforcement details are still in the air.