Mortgage Rates Dip Below 6% as Buyers and Refinancers Hold Ground
For the first time since 2022, average U. S. long-term mortgage rates have dipped below 6%, and that move is already reshaping borrower behavior: refinance applications have surged while new-home buyers continue to purchase despite higher borrowing costs.
Mortgage Rates fall below 6% for the first time since 2022
The drop marks the lowest levels since February 2023 and pushes mortgage rates under the 6% mark, a threshold that many analysts and borrowers have watched closely. StreetMatrix real estate analyst Jonathan Miller said the growth in mortgage demand reflects the gradual erosion of the lock-in effect that began in early 2022 when the Federal Reserve pivoted to higher interest rates.
Refinancing jumps as homeowners chase lower monthly payments
The Mortgage Bankers Association reported that refinance applications are 150% higher than the same week last year and up 4% from the prior week, a spike that suggests many homeowners who originally bought at 7% or 8% are racing to lower their monthly overhead. That surge shows up even as the median price tag for a new build jumped to $414, 400 last month.
New-home sales slip slightly but remain stronger than a year ago
Recent data from the Census Bureau shows new home sales dipped 1. 7% in December, yet annual sales still outpaced 2024 levels by nearly 4%, evidence that buyers are not retreating simply because mortgage rates recently came down below 6%.
Supply, pricing and the persistent lock-in effect
Housing supply currently sits at 7. 6 months; anything over six months typically cues a buyer's market, and that level has given some shoppers more leverage. Palm Beach–based RWB Construction Management’s Robert Burrage said the existing home market remains constrained by the lock-in effect, with many owners unwilling to trade a 3% mortgage for a 6% one. He added that new construction has been more agile in stimulating demand.
How builders and custom projects are responding
Burrage said his firm builds exclusively for end users rather than as speculative inventory, noting that when a custom home starts it’s typically tied to a committed client who has already secured financing or is paying cash. That, he said, removes much of the speculative risk and prevents those homes from sitting on the market waiting for a buyer.
Market data and how prices are moving
Quotes are displayed in real time or delayed by at least 15 minutes, with market data provided by FactSet. Jonathan Miller noted that rising inventory in many markets has brought more choices to consumers and slowed home price growth, even as many buyers still hope for much sharper declines in mortgage costs than have materialized.
President Donald Trump has pushed efforts to make homeownership more affordable on the program Varney & Co., and that political focus comes as the industry watches refinancing and new-home activity respond to rates under 6%.
Next milestones and near-term scheduling are unclear in the provided context.
