This week, mortgage rates fell significantly, the lowest since mid-December, dropping to 6.76% for 30-year fixed loans. Despite persistent inflation and uncertainties regarding tariff policies, trends in mortgage rates and inventory point towards a more favorable housing market for buyers. Experts note the current rates show improvement compared to last year but emphasize that the market remains distant from the post-pandemic lows below 4%. Home buying dynamics are affected by high rates and cautious sellers, resulting in stagnant sales in the early months of 2025.
Mortgage rates this week experienced the most dramatic decrease since mid-December, signaling that despite the skyrocketing inflation and concerns over the Trump administration's tariff policy, the housing market is turning more buyer-friendly.
This week, mortgage rates decreased to their lowest level in over two months. The drop in mortgage rates, combined with modestly improving inventory, is an encouraging sign for consumers in the market to buy a home.
Though mortgage rates have fallen over the past several weeks and look a bit more promising to prospective homebuyers, we are far from the home finance environment of the post-pandemic homebuying frenzy when rates were below 4%.
Buyers, who are doing the budget math to find how much home they can afford under the pressure of high mortgage rates, and sellers, many of whom are unmotivated to move because of the favorable rates they purchased at a few years ago, are stuck in the mud early in 2025.
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