3rd Week of Mortgage Rate Drops...

by Josh Bohling

Mortgage Rates Hit Lowest Levels Since December: What It Means for Homebuyers and Homeowners

Mortgage rates have fallen to their lowest levels since mid-December, marking the third consecutive week in which rates have remained below 7%. According to data provided to NerdWallet by Zillow, the average rate for a 30-year fixed mortgage declined by 11 basis points to 6.81% for the week ending February 6, 2025. While this decline offers a glimmer of hope for potential borrowers, those who were expecting significantly lower rates in 2025 may still find the current figures disappointing, especially given that rates were around 6% as recently as September 2024.

Refinancing Fuels Growth in Mortgage Applications

Mortgage applications experienced a 2.2% increase for the week ending January 31, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey released on February 5. While purchase applications saw a slight dip, refinance applications surged by 12%, marking their strongest increase since December 2024.

Joel Kan, MBA’s vice president and deputy chief economist, highlighted that mortgage applications have reacted positively to the recent dip in rates. Refinance applications accounted for 39% of all mortgage originations last week, up from 37.1% the previous week, indicating growing interest among homeowners looking to take advantage of the lower rates.

Weighing Your Mortgage Options

Whether you are considering refinancing or purchasing a home, now is a crucial time to explore your options. With mortgage rates exhibiting a slight downward trend and refinancing activity gaining momentum, comparing lender offers can help you secure the best financial outcome. Taking the time to assess your situation and shop around for competitive rates can make a significant difference in your long-term financial health.