The recent decline in mortgage rates is bringing homebuyers back into the game in time for the spring selling season, in what Redfin experts consider an “encouraging sign” for the struggling U.S. housing market.
Why It Matters
Over the past five years, home prices have skyrocketed across the country as a historic lack of supply led to pent-up demand.
The sudden rise of mortgage rates in 2022 following the Federal Reserve’s aggressive rate-hiking campaign to combat inflation has since exacerbated the existing affordability issues, pushing many aspiring homebuyers onto the sidelines of the market and discouraging owners holding onto lower mortgage payments from selling.
While experts initially expected mortgage rates to be around the 5 percent mark this year, offering some respite to struggling homeowners, they have since revised their forecasting to account for rates lingering between the 6 percent and 7 percent mark throughout 2025 and 2026.
Under this scenario, the recent decline in mortgage rates—even if it is not the big drop many might have hoped for—represents both buyers’ and sellers’ best opportunity to approach the market.
What to Know
In what can be considered good news for both buyers and sellers, mortgage rates are trending down and home prices are growing at their slowest pace since July 2024.
As of March 13, the average 30-year fixed-rate mortgage stood at 6.65 percent, up 2 basis points from the week before, but down 9 basis points from a year earlier, as per…
