Mortgage rates have fallen to about 6.3%, a four-week low and below last year’s levels.
The decline offers modest relief to buyers but rates remain high enough to limit affordability.
Economists say continued volatility and economic uncertainty could keep the housing market subdued.
After jumping in March at the start of the Iran war, mortgage rates in the U.S. are edging lower again, offering a small but notable boost to prospective homebuyers as the critical spring selling season unfolds.
Freddie Mac said in its latest weekly survey that the average rate on a 30-year fixed mortgage declined to 6.30%, marking a four-week low and a meaningful drop from 6.83% a year ago. The dip represents the second consecutive weekly decline and the lowest level since mid-March.
“Mortgage rates declined this week to a four-week low… a meaningful improvement for homebuyers,” said Freddie Mac Chief Economist Sam Khater in the company’s press release.
Relief for buyers — but not a breakthrough
While the easing in rates is welcome news, borrowing costs remain elevated compared with the ultra-low levels seen earlier in the decade. Rates hovering above 6% continue to stretch affordability, especially as home prices remain high and inventory is limited.
Recent data shows the housing market is still struggling to regain momentum. Existing-home sales fell in March and are hovering near 30-year lows, reflecting a combination of high costs and cautious buyers.
Even with the recent drop, economists say many would-be buyers are still sidelined.
Affordability challenges and economic uncertainty continue to constrain demand, analysts note, despite early signs of increased activity like rising refinance applications.
Volatility remains a key risk
Mortgage rates have been particularly volatile in recent weeks, driven by shifting inflation expectations and geopolitical tensions. Rates climbed sharply in March amid concerns tied to global conflicts and rising energy prices, before easing as those fears subsided.
Because mortgage rates tend to track the 10-year Treasury yield, they remain sensitive to inflation data and Federal Reserve policy. The Fed’s decision to keep interest rates elevated to combat inflation could limit how far mortgage rates fall in the near term.
What it means for the housing market
The recent decline could provide a modest tailwind for the housing market during its busiest season. Lower rates can improve purchasing power and encourage both buyers and sellers to re-enter the market.
However, the broader outlook remains uncertain. While some forecasts suggest rates could drift below 6% later this year, that trajectory depends heavily on inflation cooling and economic stability.
For now, the market appears stuck in a middle ground: rates are improving enough to spark interest, but not enough to fully unlock demand.
In practical terms, that likely means a gradual, uneven recovery rather than a sharp rebound — with affordability continuing to be the biggest constraint for U.S. homebuyers in 2026.