A “For Sale” sign appears in front a home in a residential neighborhood. (David Ryder/Bloomberg via Getty Images)
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Mortgage rates have dipped, signaling a positive sign for consumers in the market for a new home.
What are the current mortgage rates?
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By the numbers:
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The average rate on a 30-year mortgage in the U.S. fell six weeks in a row from 7.04% in mid-January to 6.76% last week, the Associated Press reported, citing mortgage buyer Freddie Mac. In 2024, the rate was 6.94%.
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RELATED: Mortgage demand jumps as rates drop
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The average rate is now at its lowest level since Dec. 19 when it was 6.72%. It dropped to a 2-year low in September 2024 but is still more than double the 2.65% record low the average rate hit a little over four years ago.
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Mortgage rates effect on the housing market
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Why you should care:
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The fall in mortgage rates in 2025 hasn’t been enough to push home sales higher. According to the Associated Press, sales of previously owned homes dipped in January as soaring mortgage rates and prices froze out would-be homebuyers amid a larger selection of properties on the housing market. Pending home sales point to possible further sales declines in coming months. Sales fell to an all-time low in January.
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According to the Mortgage Bankers Association, mortgage applications last week increased 20.4% compared to the previous week, while home loan refinancing applications spiked 37%. This surge in applications indicates that the lower mortgage rates may encourage consumers to further consider buying a home.
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How are Trump’s tariffs tied to mortgage rates?
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Dig deeper:
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According to the Associated Press, tariffs can push inflation higher, which may translate into higher yields on the 10-year Treasury note, driving up mortgage rates. This is due to bond investors demanding higher returns as long as inflation remains high.
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Additionally, the Trump administration’s tariffs on imports may affect the outlook for where mortgage rates will go moving forward.
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The Source: Information for this story was provided by the Associated Press, which cites data from Freddie Mac on mortgage rates. This story was reported from Washington, D.C.