Mortgage Rates Drop Below 6 Percent: What This Means for Your Home Buying Power in 2025 cover art

Mortgage Rates Drop Below 6 Percent: What This Means for Your Home Buying Power in 2025

Mortgage Rates Drop Below 6 Percent: What This Means for Your Home Buying Power in 2025

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 US Housing Industry Current State Analysis Past 48 Hours

Mortgage rates have dipped below 6 percent for the first time since 2022 boosting buyer optimism and affordability in the US housing market. Freddie Mac reported the 30-year fixed-rate mortgage averaged 5.98 percent on February 26 down from 6.01 percent the prior week and far below 6.76 percent a year ago.[1][3] Zillow's February 23 analysis shows a median-income household can now afford a 331483 dollar home up 30302 dollars from last year with 82300 more homes in budget and monthly payments 8.4 percent lower.[1] Redfin notes the weekly average at 6.01 percent pushing median payments to 2599 dollars 2.6 percent below last year adding 34000 dollars in purchasing power despite wages up nearly 4 percent.[2]

Pending home sales fell 5.5 percent annually through February 22 the largest drop in over a year with new listings down 2.8 percent year-over-year as buyers remain sidelined by winter weather economic jitters and 1 percent home price rises.[2] Out-of-town buyer interest surged to 61.9 percent of views in the 100 largest metros signaling shifting consumer behavior toward broader searches.[7]

No major deals partnerships new launches or regulatory changes emerged in the past 48 hours. Supply chains show no disruptions but inventory is improving per Zillow aiding spring momentum.[1]

Compared to prior months rates trended lower from 6.96 percent in January 2025 thawing a market frozen since 2022's rate hikes.[1][3] Leaders like Zillow predict further declines through 2026 unlocking buying power while Redfin agents see affluent buyers re-entering amid easing layoff fears.[1][2] Affordability strains persist at 32.3 percent of income for median payments but conditions signal a potential spring surge if rates hold.[1]

This marks a cautious thaw with buyers gaining leverage over last year's slump.[3] Word count: 298

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