Housing News

Spring Housing Market Kicks Off with Lower Mortgage Rates

The spring housing market is kicking off with lower mortgage rates, much to the delight of homebuyers.

Rates averaged 6.76% for 30-year, fixed-rate loans in the week ending Feb. 27, according to Freddie Mac data. That was down from 6.85% in the previous week and 6.94% about a year ago.

“Mortgage rates decreased to their lowest level in over two months,” Freddie Mac’s Chief Economist Sam Khater said in a statement. “The drop in mortgage rates, combined with modestly improving [housing] inventory, is an encouraging sign for consumers in the market to buy a home.”

This spring, buyers may face a friendlier housing market.

Home prices remain high, but even small drops in rates can boost the buying power of home shoppers. A drop in rates can also result in smaller monthly mortgage payments.

“Lower rates could give the housing market the shot in the arm that it so desperately needs,” Lisa Sturtevant, chief economist of Bright MLS, said in a statement. The multiple listing service covers the mid-Atlantic region.  

In addition, buyers are finding more homes on the market to choose from. The number of home listings was up 27.5% year-over-year in February, according to Realtor.com data.

That’s allowing buyers to be choosier—and leading to more sellers cutting prices to be competitive. The number of price reductions increased 30.2% year-over-year in February, according to Realtor.com data.

Those savings, in addition to lower mortgage rates, may help buyers stretch their budgets.  

“It seems likely that rates will fall in the weeks ahead, though they are not expected to come down significantly,” Sturtevant said. “Consumers should accept rates that are volatile week-to-week, but that are gradually moving lower.”