Mortgage Rates Fall For Fifth Week Straight, But Remain Close To 7%

Homebuyers received some good news this week: Mortgage rates declined for a fifth week to their lowest level since last year and the median U.S. home-sale price rose by the smallest increase since last September. 

What To Know: According to Freddie Mac, the average rate for 30-year loans was 6.85%, down from 6.87% last week, reaching the lowest level since December 2024. 

However, borrowing costs remain near 25-year highs and continue to weigh on home sales. A report from real estate brokerage Redfin Corp. RDFN showed that the average home that sells is taking 57 days to go under contract, the longest period in five years. 

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Redfin also pointed to five months of home supply on the market as pending home sales fall and supply piles up. The increased inventory drove a more modest increase of 3.7% in U.S. home-sale prices year-over-year.  

Sam Khater, Freddie Mac's chief economist, told Bloomberg that rates hovering in a tight range could help to reassure potential buyers that they will likely remain high for some time. 

"This stability continues to bode well for potential buyers and sellers as we approach the spring homebuying season," Khater said.

Rates are unlikely to come much lower in the near term, as the Federal Reserve has signaled a "pause" in rate cuts for now. 

Fed officials highlighted increased uncertainty surrounding proposed tariffs and immigration policies, as well as strong household spending and geopolitical risks as reasons to hold rates steady and wait for further evidence of inflation coming down. 

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