The average long-term mortgage rate in the United States has fallen under 6% for the first time since late 2022, coming in at 5.98%, according to mortgage buyer Freddie Mac. This decrease marks a significant change for home shoppers as the spring home-buying season begins, compared to a year ago when rates averaged 6.76%. This drop is also part of a trend observed over the last few months with three consecutive reductions in mortgage rates.

Various economic factors influence mortgage rates including the Federal Reserve’s interest rate policies and market expectations regarding inflation and economic growth. Specifically, mortgage rates typically align with the movements of the 10-year treasury yield, which serves as a vital benchmark for lenders when pricing home loans. Currently, the 10-year treasury yield has also decreased slightly to 4.02% from 4.07%, further underscoring the favorable lending environment.

As mortgage rates continue to trend downward, it may lead to increased activity in the housing market as more buyers are encouraged to enter. This has broader implications not only for prospective homeowners but also for the real estate market and the economy as a whole, potentially fostering a greater demand for homes in the upcoming months of the spring buying season.