As inventory challenges persist in some markets and have improved in others, economists generally point to a Spring market with increased buyers, provided average mortgage rates remain at their recent years-long lows.
The latest Primary Mortgage Market Survey® (PMMS®), released by Freddie Mac Thursday, shows the 30-year fixed-rate mortgage (FRM) averaging 6.01%, down from 6.09% the previous week and hitting the lowest level since September 2022.
“This lower rate environment is not only improving affordability for prospective homebuyers, it’s also strengthening the financial position of homeowners,” said Sam Khater, Freddie Mac chief economist.
Realtor.com Senior Economist Jake Krimmel said the dip from last week follows a notable slide in the 10-year Treasury yield, which hit its lowest point since late November 2025 after last week’s softer-than-expected CPI reading and a relatively optimistic jobs report.
“For perspective, rates were around 6.6% just six months ago and stood at 6.87% this time last year,” Krimmel noted. “While today’s numbers mark a key milestone, recent Fed minutes hinted at a renewed hawkish outlook with some policymakers willing to tighten again if the progress on inflation stalls or reverses. In other words, today’s rate environment may not be permanent.”
During its Jan. 28 meeting the Federal Reserve left interest rates unchanged after three straight rate cuts from the prior three Federal Open Market Committee (FOMC) meetings of 2025.
“Although these years-long lows are arriving during a traditionally slow time of year, they are already setting the stage for the spring homebuying season,” Krimmel noted. “Buyers will be hoping this Spring looks different from 2025, when tariff-driven economic uncertainty pulled the rug out from under them by pushing rates higher heading into the busy season and hitting 6.89% in late May. There is a chance to be nearly a full percentage point lower than that this spring, which would meaningfully boost purchasing power.”
Bright MLS Chief Economist Lisa Sturtevant agreed, adding, “Lower rates should improve affordability and bring out more buyers. If rates fall below 6%, that could be the psychological push that some buyers are waiting for.”
But it’s clear that there are also other things on the minds of prospective homebuyers, she noted, pointing to the Mortgage Bankers Association’s report this week that refinancing applications rose significantly, while the number of applications for mortgages to purchase a home were up much more modestly.
“It is not just about rates for homebuyers,” Sturtevant said. “Inventory is still limited in many local markets, particularly in the Midwest and Northeast. Consumer confidence is low, as many individuals and families are dealing with higher prices for everything from groceries to cars. The weather also held back prospective homebuyers, as snow and chilly weather has impacted markets as far south as Florida.”
Krimmel also commented on inventory challenges, saying, “Without a significant return of supply through the easing of the mortgage “lock-in effect,” lower rates may simply reignite competition and spike prices, erasing the affordability relief buyers are hoping for.”
For now, economists continue to read the tea leaves heading into the Spring market, generally citing inventory improvements in some markets and continuing steady rates as positive forces. “Assuming mortgage rates remain at about where they are, or come down even further, we should see more buyers this spring as both inventory and the weather improves,” Sturtevant said.
Click here to read the full Freddie Mac report.
