The rate on a 30-year mortgage rate briefly dipped below 6% last week before popping back higher on Monday. Advisors discuss what that means for home-shopping clients
As the iconic TV character Maxwell Smart used to say, “Missed it by that much.”
The 30-year fixed mortgage rate fell to 5.98% last week, the lowest level since September 2022, according to mortgage finance company Freddie Mac. A year ago it averaged 6.76%.
Unfortunately for those house-hunters who were waiting until the benchmark rate dipped below 6% to start shopping, their opportunity may have been short lived. Mortgage rates jumped on Monday as the US-Israeli strikes on Iran sent oil prices higher, igniting fears of inflation. The yield on the 10-year Treasury note, which mortgage rates closely follow, rose back above 4% on the attack and at last check resides around 4.08%.
For those potential homebuyers who feel they missed their best shot, most advisors are telling them to be patient and, more importantly, try to base their purchase on their overall financial portfolio as opposed to a momentary dip in rates.
While a drop below 6% is psychologically significant, Sean M. Jucas (pictured, top left), managing partner at Burnham Harbor Private Wealth, a Sanctuary Wealth partner firm, encourages clients not to view housing decisions purely through the lens of rates.
“As we often say, not all financial decisions should be made on a spreadsheet. A home is both a financial asset and a life decision, and clarity around values and long-term goals matters just as much as the interest rate,” Jucas said.
That said, Jucas says he is seeing more activity around refinancing, especially among homeowners who locked in higher rates over the past two years. In those cases, the analysis is straightforward. He reviews the break-even timeline, liquidity needs, and likelihood of moving. New purchases require more nuance, however.
“While lower rates may improve affordability, we caution against reacting to rate changes alone. We evaluate lifestyle stability, career flexibility, long term cash flow, and the opportunity cost of committing capital to a down payment,” Jucas said.
Meanwhile, Michael P. Butterworth (pictured, top center), president of MP Butterworth and Associates, a Berthel Fisher firm, says that clients who are locked into a mortgage rate in the 6.75% to 7.5% range have indeed been waiting for rates to drop. And they are actively moving to refinance as long as the numbers work out.
“As far as a new home purchase, the question remains the same, regardless of rates. Does this purchase align with your goals and allow you to remain financially resilient?” Butterworth said.
Moving on, Brandon Goldstein, financial planner at Prudential Advisors, says many clients are hoping for rates to drop even further, not necessarily to the rates when the pandemic first began in the 2% to 3% range, but at least a little closer to those rates.
“To cover the closing costs associated with refinancing, we use a rule of thumb to wait until you can lower your mortgage by at least 1% prior to refinancing. As for a new home purchase, our clients’ home searches were not necessarily halted because of the higher interest rates. With lower rates, more buyers will likely enter the buying pool and thus increase the demand, driving costs higher,” Goldstein said.
Drew Koleno, founder and wealth advisor at Genesis Wealth, has been witnessing a noticeable shift toward refinancing rather than new home purchases, largely due to rates trending downward. Many of his clients who refinanced over the past year were previously locked into rates in the mid-7% to low-8% range. Refinancing into the 6% range has created meaningful financial flexibility. In many cases, clients have freed up several hundred dollars per month and over $1,000 in some instances, according to Koleno.
“That additional cash flow has allowed them to accelerate payoff of higher-interest debt such as credit cards or student loans, strengthening their overall balance sheet,” Koleno said.
While rates have been on a gradual decline, the urgency to purchase new homes has slowed in Koleno’s opinion.
“Home values have remained elevated for nearly a decade, and affordability continues to be a concern. I do anticipate purchase activity picking up this spring and throughout 2026, particularly with rates dipping below 6%. However, many clients are still waiting for pricing to normalize before re-entering the market,” Koleno said.
Brian C. Baker, financial advisor at Strategic Blueprint/SFA Advisors, says he has seen some increased interest in refinancing, but it’s more of a "curious interest" than genuine opportunity seeking. In his view, many homeowners locked in rates in the 2.5% to 3.5% range during 2020–2021, so even a drop below 6% does not create much opportunity for them.
Where he does see activity, however, is among clients who bought in the 6.5% to 7.5% range over the past two years. For them, even a modest rate improvement can improve monthly cash flow.
“With refinancing, our analysis is very straightforward and math-driven. We look at a break-even timeline, total interest saved, liquidity impact, and how the change affects broader financial flexibility. But most feel like lower rates are coming, so there will be some ongoing hesitate to pull the trigger,” Baker said.
Second homes are different
If the purchase is a second home, however, then advisors say they need to dive deeper into the client's risk tolerance, tax situation, expected real estate versus equity returns, and the overall goal of what the client is seeking to get out of the purchase. For many clients, the goal is not always to maximize financial returns.
“If we are talking about a primary residence, we are not talking about excess capital. Rather, we are talking about the core housing line item in a family’s budget. Buy the house that works for your family, and then consider the investment potential,” according to Joshua Schwartz (pictured, top right), CEO of Retirement Plan Advisors, affiliated with Cambridge Investment Research.
For investment property purchases, however, the equation is very different in Schwartz’s opinion.
“Financial markets have just experienced a strong three years of returns, with the S&P 500 delivering double-digit returns from 2023 through 2025. Add to that recent geopolitical uncertainty with the US military action against Iran, which could impact financial markets and be inflationary due to higher oil prices, we may be at a moment of elevated equity prices and relatively low interest rates,” Schwartz said.
