Mortgage rates fell below 6% for the first time in three-and-a-half years, Freddie Mac said, citing its Primary Mortgage Market Survey. 

The average 30-year fixed-rate mortgage dropped to 5.98%, passing an important psychological boundary just as the busy spring homebuying season approaches. The dip follows last week’s movement, when the average rate fell to 6.01%, its lowest level since September 2022. The rate was 6.76% a year ago. 

“For the first time in three and a half years, the 30-year fixed-rate mortgage dropped into the 5% range, falling even lower than last week’s milestone,” Freddie Mac Chief Economist Sam Khater said. “This rate, combined with the improving availability of homes for sale, is meaningful and will drive more potential buyers into the market for spring homebuying season.” 

At the same time, the Mortgage Bankers Association reported that housing affordability declined in January, with the national median payment rising from $2,025 to $2,070, its first increase in seven months. Nevertheless, the MBA expects affordability to improve going forward. 

“While the median purchase application amount rose from $320,000 to $332,000, mortgage rates declined over the month,” said Edward Seiler, MBA’s associate vice president of housing economics and executive director of the Research Institute for Housing America. “With mortgage rates mostly trending downward, and home-price growth flat or down in many markets, affordability conditions should improve in the months ahead as housing inventory increases.” 

Mortgage applications increased during the week ended Feb. 20, the MBA said separately. The association’s Market Composite Index inched 0.4% higher week over week, driven in large part by refinances. The Refinance Index was up 4% week over week and 150% year over year. The seasonally adjusted Purchase Index was down 5% week over week.