Housing News

Mortgage Rates Dip: A Holiday Gift for the Housing Market

Homebuyers and homeowners have received the gift of lower mortgage interest rates this holiday season.

Mortgage rates tumbled a little to an average of 6.18% for 30-year, fixed-rate loans in the week ending Dec. 24, according to Freddie Mac data. This is down from 6.21% in the previous week.

Rates were also significantly lower than this time last year, when they averaged 6.85%.

“Declining rates offer a timely and welcome gift for aspiring homebuyers” said Freddie Mac Chief Economist Sam Khater in a statement.

Even small rate drops can save homebuyers and homeowners who refinance their mortgages big money.

For example, someone taking out a $400,000 mortgage would pay $2,444.69 a month in principal and interest with a 6.18% interest rate. (This does not include property taxes, insurance costs, or homeowner association fees.)

That is a savings of $176.35 a month from when rates averaged 6.85% last year. Over time, that adds up to $2,116.20 a year and $63,486 over the life of a 30-year, fixed-rate loan.

These savings can boost a buyer’s purchasing power or lower their payments.

Homeowners who refinance their loans may also be able to enjoy the savings.

Mortgage rates are expected to remain in the low 6% range and potentially even dip into the high 5% territory in 2026, according to real estate experts.

“Even with rates falling to an eight-week low, with less than a week before the end of the year, buyers and sellers are looking ahead to 2026,” said Bright MLS Chief Economist Lisa Sturtevant in a statement. The multiple listing service covers the mid-Atlantic region.

“There will be more [housing] inventory to choose from next year, which will mean that in many markets buyers will have much more leverage and price pressure will ease,” she said.