Mortgage rates fall below 6%, matching their lowest level since 2022

A stock market sell-off sent investors rushing to the relative safety of the bond market on Monday morning, causing yields to fall and mortgage rates to track.

The average interest rate on a 30-year fixed mortgage fell to 5.99% on Monday, according to Mortgage News Daily, matching its lowest levels since 2022. Last year at this time the rate was 6.89%.

The drop in yields is due to a combination of factors, including new uncertainty over tariffs, cooling inflation and economic weakness seen in Friday’s lackluster GDP report.

While interest rates briefly dipped into the 5% range for a few hours in January, they bounced back the same day. That’s unlikely this time, according to Matthew Graham, chief operating officer at Mortgage News Daily.

“This visit to the Big Five looks more sustainable on paper,” Graham said. “As long as the broader bond market does not see a sell-off in any major way, mortgage interest rates have a better chance of staying closer to current levels than they were last time around. If the broader bond market improves further (i.e. 10-year bond yields fall below 4.0%), mortgage rates will likely post additional gains.”

Lower interest rates will likely lead to more refinancing, which has risen over the past few weeks. Home loan refinance applications are up about 130% from a year ago, according to the Mortgage Bankers Association.

Lower rates are a positive sign heading into the all-important spring housing market. Buyers entering the market today will have more purchasing power than they did last spring.

For example, if a buyer made a 20% down payment on a median-priced home, about $400,000 according to the National Association of Realtors, he or she would have a monthly payment of $1,916 for principal and interest. One year ago, that payment was $2,105, a difference of $189.

While the difference in monthly payment may not seem like much, more borrowers will qualify for a loan overall at lower rates today. “With mortgage interest rates approaching 6%, an additional 5.5 million households who did not qualify for a mortgage one year ago will qualify at today’s lower interest rates,” Lawrence Yun, chief economist for the Realtors Association, noted in his report on pending home sales in January.

He warned that most newly eligible households do not act immediately, “but based on past experience, about 10% could enter the market – which could add approximately 550,000 new homebuyers this year compared to last year.”

So far, home mortgage applications have not seen much of a reaction to lower interest rates. These orders were only 8% higher year over year in mid-February.

Correction: This story has been updated to correct that 30-year fixed mortgage rates on Monday matched their lowest level since 2022. The previous version misstated the milestone.