The rapid runup in rates seen in 2022 is fading into memory – and borrowers are adjusted to the new reality
Three years ago, homebuyers flocked to the sidelines amid growing alarm over the rising cost of borrowing as mortgage rates surged from rock-bottom lows. But while there’s little chance of rates plunging again – and the average 30-year fixed mortgage continues to hover around 7% – some of that so-called “sticker shock” has dissipated among mortgage shoppers.
That’s according to Kristin O’Neil (pictured top), senior loan officer at Open Door Lending, who told Mortgage Professional America potential clients were no longer as dismayed by the rapid jump in rates since 2022 as they were when that spike began.
Then, borrowers saw their purchasing power blitzed within a matter of weeks as rates shot up from their pandemic-era lows. While current rates are high, they’re also less prone to rapid and sudden swings – and O’Neil said that’s allowed most borrowers to know where they stand well in advance.
“I think most buyers that are getting into the market now know where rates are even before they start,” she said. “I think we don’t have that sticker shock that we had a couple of years ago when people started looking when rates were in the twos, and then went into the fives.
“Obviously that is much different in terms of your budget – just the overall mental toll that took people having such a large, quick runup like that.”
With US economic data pointing to a cooling trend, lower Treasury yields could soon translate to cheaper mortgage rates. This shift in Fed rate cut expectations by September offers potential relief for homebuyers amid affordability challenges. https://t.co/MbY39jWL0T
— Mortgage Professional America Magazine (@MPAMagazineUS) June 4, 2025
Rates on a more predictable path
This week, average 30-year rates slipped to 6.85% according to Freddie Mac, the first declines seen for several weeks. For most of the past year and a half, they’ve flitted between 6% and 7%, a higher level than most brokers and borrowers would like to see.
Still, rates have been much more consistent during that period than in the prior year. At the beginning of 2022 (January 6), the 30-year average was as low as 3.22%. By November 10, it had skyrocketed to 7.08%.
That alarming increase arrived amid soaring inflation, aggressive monetary policy, and shifting investor expectations. But O’Neil said borrowers have now grown accustomed to the high-rate reality and are less likely to be deterred by pricier mortgages than they would have been when low rates were still fresh in the mind.
“I think for the majority of buyers right now, this is what they’re expecting,” she said. “They’re pretty well prepared. They’re doing the research: obviously, we’d all love rates to come down, but the majority of people understand the market a little bit better and they’re prepared for it.”
As for how far rates might fall between now and the end of the year? Expectations differ, although few analysts are forecasting a slide below 6% before January.
But that jump in rates has been offset in part by improving affordability thanks to lower prices in some markets, and less frenetic competition during the bidding process.
“Overall, I think we’re seeing better terms for buyers – a more level playing field,” O’Neil said.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
