Mortgage Rates Just Hit Their Lowest Point Since 2022. Here's What That Means for You.
If you have been waiting for a better time to buy a home, that moment may have arrived.
The average 30-year fixed mortgage rate recently dropped to 6.01%, according to Freddie Mac's Primary Mortgage Market Survey. That is the lowest level since September 2022, and it marks a significant shift from the 7%-plus rates that kept so many buyers on the sidelines over the past two years.
So what does this actually mean in dollars and cents? Let's break it down.
Your Monthly Payment Just Got a Lot More Manageable
On a $400,000 home with 10% down and a 30-year fixed mortgage, the difference between a 7.2% rate and a 6.01% rate works out to roughly $280 less per month. Over the life of the loan, that adds up to more than $100,000 in savings.
That is not a rounding error. That is a family vacation every year, a fully funded emergency savings account, or thousands of dollars back into your monthly budget.
Why Are Rates Dropping?
Several factors are working together. The Federal Reserve cut rates three times between September and December 2025, and while mortgage rates do not move in lockstep with the Fed, those cuts sent a strong signal to the bond market. Inflation has cooled considerably from its 2023 peak, and investor confidence in long-term economic stability has pushed Treasury yields lower.
The result is a borrowing environment that looks meaningfully better than anything we have seen in over three years.
What This Means If You Are Shopping for a Home
Lower rates do two important things for buyers. First, they reduce your monthly payment directly. Second, they increase your purchasing power. A buyer who qualified for $375,000 at 7% might now qualify for $415,000 or more at today's rates, without any change in income.
That expanded budget can be the difference between settling for a home that checks most of your boxes and finding one that checks all of them.
What This Means If You Already Own a Home
If you bought or refinanced in 2023 or early 2024 when rates were above 7%, now is a good time to run the numbers on a refinance. Even a one-point drop in your rate can translate to meaningful monthly savings, and with rates near 6%, many homeowners are finding that the math finally works in their favor.
The key is to calculate your break-even point. If the savings from a lower rate cover the closing costs within 18 to 24 months, a refinance is typically worth considering.
Should You Wait for Rates to Drop Further?
Nobody can predict exactly where rates will go next. Some economists expect them to settle in the mid-to-high 5% range later this year, while others believe they could tick back up if inflation proves stubborn.
What we do know is that today's rates are the best we have seen in years. Waiting for perfection can mean missing a genuinely good opportunity.
If you are thinking about buying, refinancing, or just want to understand your options, reach out today. A quick conversation can help you see exactly where you stand and what is possible at today's rates.