What happened to mortgage rates this week?
The Freddie Mac 30-year mortgage rate dropped by 3 basis points to 5.98% this week, dipping into the 5% range for the first time in 3.5 years. The downward drift this week was in line with the 10-year Treasury yields. Specifically, the Supreme Court struck down the administration’s broad emergency tariff powers, and the president responded by immediately invoking alternative “Section 122” authority to impose new temporary duties. This legal tug-of-war has triggered a flight to safety among investors, pushing bond prices higher and yields lower, helping mortgage rates settle around 6%. However, as this week’s decline stems from market volatility rather than fundamental economic data, more supportive economic data is needed to establish a consistent trend.
What does this mean for the housing market?
The stabilization of mortgage rates near 6% this spring marks a notable turning point where, for the first time since the post-pandemic spike, both the psychological barrier and the numerical threshold of the 5% range have finally been reached. Since the national inventory recovery has recently stalled, a lower rate could bring more homeowners who were previously “locked in” to finally enter the market. While today’s borrowing costs remain high, as 70% of mortgage holders have rates below 5%, it is far more encouraging than the high 6% or 7% ranges seen over the previous two spring seasons.
