Slight rate dip adds to a gradual thaw in affordability and demand
Mortgage rates inched lower again this week, keeping borrowing costs near their lowest levels in three years and giving rate‑sensitive borrowers another small opening to act.
Freddie Mac’s latest Primary Mortgage Market Survey showed the average 30‑year fixed mortgage rate at 6.09% as of February 12. That's down from 6.11% a week earlier and well below 6.87% a year ago.
The 15‑year fixed averaged 5.44%, compared with 5.50% last week and 6.09% a year earlier, for borrowers with strong credit and 20% down.
“Bolstered by strong economic growth, a solid labor market and mortgage rates at three‑year lows, housing affordability continues to measurably improve,” said Sam Khater, chief economist at Freddie Mac.
“These factors have caught the attention of many prospective homebuyers, driving purchase application activity higher than a year ago.”
Mixed signals on mortgage demand
While Freddie Mac pointed to stronger purchase interest than a year earlier, weekly data from the Mortgage Bankers Association showed a modest pullback. MBA reported this week that total mortgage applications slipped 0.3% from the prior week, with purchase applications down 2% on a seasonally adjusted basis, even as the refinance index was more than 100% higher than a year ago.
MBA chief economist Mike Fratantoni previously said “our forecast is for mortgage rates to stay within a fairly narrow range over the next few years,” adding that most housing economists do not expect a return to sub‑6% borrowing costs in the near term.
A slow‑burn affordability recovery
MBA projected late last year that 30‑year rates would largely hold between 6% and 6.5% through 2026, underpinning “a gradual recovery in purchase activity rather than a sudden refinancing boom.”
Brokers said even a modest additional decline – into the “low sixes” or high‑5% range – could meaningfully improve buyer sentiment but would fall short of the boom‑era refi waves.
In a world of steady‑around‑6% rates, growth would depend less on waiting for a rate rescue and more on winning share in a gradually expanding purchase market.
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