Mortgage rates continued to drop this week, as economic uncertainty raised the prospects for further rate cuts from the Federal Reserve this year.
The average rate on 30-year fixed home loans dropped to 6.63% for the week ending March 6, down substantially from 6.76% the prior week, according to Freddie Mac. Rates averaged 6.88% a year ago.
Mortgage rates have now declined for seven consecutive weeks, returning to levels last seen in December after peaking at just above 7% in the middle of last month.
“As the spring homebuying season gets underway, the 30-year fixed-rate mortgage saw the largest weekly decline since mid-September,” says Freddie Mac Chief Economist Sam Khater. “The decline in rates increases prospective homebuyers’ purchasing power and should provide a strong incentive to make a move.”
Mortgage rates have benefited from a combination of factors, including economic uncertainty and growing fears of a potential recession, which have reduced long-term borrowing costs.
Falling global oil prices have also been beneficial, reducing the prospects of continued high inflation. And stock market jitters, fueled by President Donald Trump‘s tariffs on Canada and Mexico, have driven investor cash into bonds, driving down long-term rates.
The rate relief is welcome for homebuyers as the spring buying and selling season kicks off. Still, most experts project that mortgage rates will remain above 6% through the end of the year and beyond.
“Though we expected a bit of good news on rates this week, we do not anticipate significant relief from high mortgage rates in the near future because of inflation remaining stubbornly high, which will not be helped by the tariffs that the Trump administration appears committed to rolling out,” says Realtor.com® Senior Economist Joel Berner.
“Expectations of higher consumer prices in the future leads debt market investors to demand higher returns on their investments, indirectly pulling interest rates up at the same time that they deter the Federal Reserve from making direct cuts to interest rates,” he adds.
Still, rates have already fallen enough to rekindle some homeowner interest in refinancing mortgages, says Khater.
“In fact, the refinance share of market mortgage applications released this week reached nearly 44%, the highest since mid-December,” he notes.
Prices down as new listings rise
The Realtor.com economic research team’s weekly housing market update shows that for the week ending March 1, the median list price of homes on the market was down 0.3% from the same week last year.
It marked the 40th week in a row in which the national median home list price was either flat or declining on an annual basis, a stretch dating to June 2024.
Although median listing prices are modestly down, sales prices are up, due mainly to a faster sales pace at the higher end of the market. In other words, more expensive homes seem to be finding more buyers than modestly priced one.
Meanwhile, the number of new listings hitting the market last week was up 0.1% from last year, the eighth consecutive week of new listing growth.
