For the first time in six months, the average 30-year fixed mortgage rate has dipped below 6%, clocking in at 5.89% according to Freddie Mac's latest survey. The decline, spurred by the Federal Reserve's recent signals of upcoming rate cuts, has already triggered a 14% uptick in mortgage applications nationwide.
"We're seeing pent-up demand finally unlock," said Lawrence Yun, chief economist at the National Association of Realtors. "Buyers who've been waiting since rates peaked above 7.8% are re-entering the market. But inventory remains tight, so we're not likely to see a buyer's market anytime soon."
The national median home price now stands at $416,000, down 3% from the peak in late 2024 but still 22% above pre-pandemic levels. In competitive markets like Austin, Phoenix, and Boise, prices have fallen 8-12%, while Northeast and Midwest markets remain relatively stable.
For prospective buyers, the math has improved considerably. A $400,000 mortgage at 5.89% carries a monthly payment of approximately $2,370, compared to $2,640 at 7.5% — a savings of $270 per month or $3,240 annually.
However, housing experts advise against trying to time the market perfectly. "If you're buying a home to live in for five-plus years, and you can comfortably afford the payment, now is a reasonable time," said Daryl Fairweather, chief economist at Redfin. "But if you're stretching your budget hoping for rapid appreciation, reconsider. This isn't 2021."
