Mortgage rates just dropped below 6%: Is now the time to buy a home?
30-year mortgage rate dips below 6% in 2026. Image Credit: Getty Images/NurPhoto
Mortgage rates have dropped below 6% for the first time since 2022, offering long-awaited relief to homebuyers navigating a challenging housing market. According to the latest data from Freddie Mac, the average rate on a 30-year fixed mortgage fell to 5.98%, down from 6.01% last week and significantly lower than the 6.76% average recorded a year ago.
The milestone marks a psychological and financial turning point for buyers and sellers alike, especially after mortgage rates hovered above 6% for more than three years.
30-Year Fixed Mortgage Rate Dips to 5.98%
The benchmark 30-year fixed mortgage rate now stands at 5.98%, its lowest level since September 2022. While the decline of just 0.03 percentage points may appear small, analysts say the drop below 6% is symbolically significant.
Lower mortgage rates directly affect monthly payments. For a $400,000 home loan, even a small reduction can translate into hundreds of dollars saved annually.
The 15-year fixed mortgage rate, however, moved slightly higher to 5.44% from 5.35% the previous week, indicating mixed trends within the broader lending market.
Why Mortgage Rates Are Falling
Mortgage rates are influenced by several economic forces, most notably the 10-year Treasury yield. When bond yields fall, mortgage rates typically follow.
Recent declines in the 10-year yield, hovering near 4%, have eased pressure on home loan rates. Market volatility, geopolitical developments, and shifts in investor behavior have all contributed to the downward trend.
Additionally, the Federal Reserve’s decision to lower its benchmark interest rate to 2.4% has created a more favorable lending environment. While mortgage rates do not directly track the Fed’s rate decisions, they are closely correlated.
Some economists caution that the recent drop is partly tied to market volatility rather than sustained economic improvement, meaning rates could fluctuate in the coming months.
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How This Impacts Homebuyers and Homeowners
A mortgage rate below 6% improves affordability at a time when housing supply is gradually increasing.
Lower rates can:
- Reduce monthly mortgage payments
- Improve buyer purchasing power
- Encourage refinancing for existing homeowners
- Stimulate housing market activity during peak spring season
For example, a buyer securing a 5.98% rate instead of 6.76% could save thousands of dollars over the life of a 30-year loan.
Industry analysts say the combination of moderating inflation and improved housing inventory may help revive a market that saw historically low sales levels in 2025.
Federal Policy and Housing Market Support
The housing market has also been influenced by federal action. President Donald Trump recently highlighted improvements in mortgage affordability during his State of the Union address, pledging continued attention to housing.
The administration directed government-backed mortgage entities to purchase $200 billion in mortgage bonds, a move designed to help lower rates further and increase liquidity in the housing market.
At the same time, discussions around potential structural changes to government-sponsored mortgage enterprises have added another layer of policy uncertainty.
Is This the Start of a Long-Term Trend?
While the drop below 6% is encouraging, experts say sustained improvement depends on stable inflation data and continued economic growth.
Some analysts describe the current rate decline as a “flight to safety” reaction in bond markets rather than a definitive shift. If economic data weakens or geopolitical tensions escalate, rates could move again.
Still, the symbolic return to sub-6% mortgage rates is likely to boost buyer confidence, particularly among first-time buyers who were priced out during the peak rate cycle.
What Does It Mean for You?
For prospective homebuyers, this may be a strategic window to explore purchasing opportunities before rates shift again.
For homeowners, it may signal a chance to refinance, provided the rate reduction meaningfully offsets closing costs.
Ultimately, mortgage rates below 6% represent more than just a number; they reflect improving affordability conditions and renewed momentum in the housing market.
FAQ
What are mortgage rates right now in 2026?
The average 30-year fixed mortgage rate is currently 5.98%, according to the latest survey data.
Why did mortgage rates fall below 6%?
Mortgage rates declined due to lower Treasury yields, cooling inflation, and recent Federal Reserve rate cuts.
Is 5.98% a good mortgage rate?
Compared to last year’s average of 6.76%, 5.98% represents improved affordability and is the lowest level in over three years.
Will mortgage rates continue to drop in 2026?
Future movements depend on inflation trends, economic growth, and bond market performance. Rates could fluctuate.
How much does a lower mortgage rate save?
On a $400,000 loan, even a 0.5% rate difference can save thousands over the life of a mortgage and reduce monthly payments significantly.
Should I buy a house now or wait?
If affordability fits your budget and rates are favourable, acting during a dip may help lock in lower payments before rates rise again.
Can I refinance if rates fall further?
Yes, refinancing is possible if rates decline further and the savings outweigh closing costs.