If you’ve been waiting to buy a home due to high mortgage rates, now might be the time to reconsider. Mortgage rates have been falling recently, creating a window of opportunity for you to dive back into the market.

Mortgage rates have been on a downward trend for seven weeks in a row, according to data from Freddie Mac. Currently, the average weekly rate is at its lowest point this year.

That might not seem like a big change, but it’s actually important. The drop from over 7% to the mid-6% range can really shift how you think about buying a home. This is especially true considering that forecasts suggested we wouldn't see this number until around the third quarter of this year.

Why Are Rates Decreasing?

Joel Kan, who is the VP and Deputy Chief Economist at the Mortgage Bankers Association, mentions that the recent economic uncertainty is contributing to a decrease in interest rates.

““Mortgage rates declined last week on souring consumer sentiment regarding the economy and increasing uncertainty over the impact of new tariffs levied on imported goods into the U.S. Those factors resulted in the largest weekly decline in the 30-year fixed rate since November 2024.”
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— Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA)

The recent drop in mortgage rates is happening at a perfect time, providing some relief as we head into the spring market. Keep in mind, though, that mortgage rates can change rapidly, so there might be some ups and downs ahead. The current decline could be a prime opportunity for you to maximize your purchasing power.

How Lower Rates Impact Your Buying Power

Even slight fluctuations in interest rates can impact your monthly payments. Let's break down the numbers. The chart below illustrates what your monthly payment (including principal and interest) would be for a $400K home loan if you had bought a house at the peak mortgage rate of 7.04% in mid-January, compared to what your payments might look like if you purchase a home today:

In just a few weeks, the expected payment on a $400K loan has dropped by more than $100 a month. That’s a noteworthy savings. When you're making a major decision like buying a home, every little bit matters.

Keep in mind that changes in the economy have caused rates to drop more quickly than anticipated. However, this situation might not last, leading to potential fluctuations in rates in the coming days and months. If you're holding off on making a purchase, carefully consider this current chance to act if you're ready.

Bottom Line

Mortgage rates have dropped, providing buyers with some much-needed breathing room. If you’ve been holding off for rates to decline before making a move, this might be the opportunity you’ve been waiting for.

Would a smaller monthly payment make home buying seem more achievable for you? Let’s go over the numbers together and figure it out.