Housing News

Mortgage Rates Remain Near Lowest Level Since 2022

The spring housing market got some more good news in the last week, as mortgage interest rates hovered near their lowest level in almost four years.

Mortgage rates averaged right at 6% for 30-year, fixed-rate loans in the week ending March 5, according to Freddie Mac. That’s up ever so slightly from the previous week, when they dipped below 6% for the first time since September 2022.

A year ago at this time, the 30-year mortgage rate averaged 6.63%. This week’s rate is also down substantially from two years ago, when rates were about 6.88%.

Lower rates make it more affordable for buyers to purchase a home or stretch their budgets. It may also save existing homeowners money if they refinance their loans.

“Rates are down nearly a full percentage point from this time in 2024, spurring activity from buyers, sellers and owners,” said Freddie Mac Chief Economist Sam Khater in a statement. “As a result, refinance activity is up, and purchase applications are ahead of last year’s pace.”

As Khater noted, mortgage activity has risen over the last few weeks. Homebuyers and homeowners are sensitive to interest rate fluctuations, especially those that see rates drop.

Mortgage applications were up by 11% in the week ending Feb. 27, according to the latest data from the Mortgage Bankers Association (MBA).

The MBA report also showed that refinance applications were up 14.3% over the previous week and rose 109% from the previous year. Purchase applications were also up, increasing by 6.1% over the previous week.

“Refinance applications increased for the fourth straight week to the strongest pace since 2022,” MBA Deputy Chief Economist Joel Kan said in a statement.

Some of those homeowners likely got a mortgage when rates were pushing 8% a few years ago. Dropping their interest rates by nearly two percentage points may result in big savings in both the short-term and long-term.

If someone got a home loan in October 2023 when rates were averaging around 7.8%, they could save more than $350 a month if they refinanced their mortgage. (This assumes they bought a $400,000 home with 20% down.) That adds up to more than $4,000 a year and over $120,000 during the life of a 30-year loan.