Mortgage rates hit lowest level in more than 3 years

(NewsNation) — Long-term mortgage rates are at their lowest level in more than three years, and Americans have been moving fast to capitalize.

The average 30-year fixed mortgage rate fell to 6.06 percent this week, down from 6.16 percent last week and the lowest level since September 2022, according to Freddie Mac. A year ago, the 30-year fixed rate averaged 7.04 percent.

The latest drop comes after President Trump announced he was directing the government-sponsored mortgage giants, Fannie Mae and Freddie Mac, to purchase $200 billion in mortgage bonds.

“This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable,” the president wrote earlier this month on Truth Social.

The news briefly pushed mortgage rates below 6 percent the next day before they inched slightly higher again, according to Mortgage News Daily. It also set off a spike in refinance demand.

Refinance applications surged 40 percent last week from the week prior, while refinance demand was 128 percent higher than the same week a year earlier, the Mortgage Bankers Association said in a report. Total mortgage application volume jumped 28.5 percent from the week before.

Borrowing costs on 15-year mortgages, which are popular with homeowners refinancing, fell to 5.38% this week, the lowest level since Oct. 2024, Freddie Mac data shows.

Mortgage rates began trending lower in July as investors anticipated Federal Reserve interest rate cuts. The decline has helped affordability: A homebuyer on a $3,000 monthly budget has gained over $30,000 in purchasing power over the past six months, according to Redfin.

Today’s low 6 percent rates are an improvement, but they’re still roughly twice as high as the historic lows seen in 2021, and major housing forecasts don’t expect them to fall much further in 2026.

Trump’s recent directive is also unlikely to send rates significantly lower than they already are, Redfin said, noting that the mortgage-bond plan would be a “relatively small asset purchase program by historical standards.”

Rather than instant relief, the housing market will likely see a slow thaw as the pool of homeowners locked into sub-3 percent pandemic mortgage rates gradually shrinks.

A recent Realtor.com analysis found that, in the third quarter of 2025, the share of homeowners with mortgage rates above 6 percent had surpassed those with rates below 3 percent.

If housing inventory continues to improve and long-term rates stay near a three-year low, the market could be on track to end a sales slump dating back to 2022

“It appears that housing activity is improving and poised for a solid spring sales season,” Sam Khater, Freddie Mac’s chief economist, said in a release.