If you’ve been holding off on buying a home due to high mortgage rates, now might be the perfect time to reconsider. Mortgage rates have been trending downward recently, creating a more favorable environment for buyers looking to enter the market.

For the past seven weeks, mortgage rates have been consistently declining, according to data from Freddie Mac.. In fact, they’ve now reached their lowest levels of the year (see graph below):

While the shift may seem subtle, it’s actually quite significant. The drop from over 7% to the mid-6% range is earlier than many experts predicted, as forecasts initially suggested we wouldn’t reach this point until later in the year (see graph below):

Why Are Rates Coming Down?

According to Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA), several economic factors have contributed to this decline:

”Mortgage rates declined last week on souring consumer sentiment regarding the economy and increasing uncertainty over the impact of new tariffs levied on imported goods into the U.S. Those factors resulted in the largest weekly decline in the 30-year fixed rate since November 2024.”

This decline comes at an opportune time, just as the spring housing market is heating up. However, mortgage rates can fluctuate rapidly, so buyers should be prepared for some volatility. That said, the current dip may provide the perfect window to secure a better rate before any potential increases.

How Lower Rates Impact Your Buying Power

Even small reductions in mortgage rates can make a significant difference in affordability. To put things in perspective, here’s how your monthly payment (principal and interest) could change on a $400K home loan based on recent rate shifts:

If you had purchased a home when rates peaked at 7.04% in mid-January, your monthly payment would have been significantly higher than if you were to buy now (see chart below):

In just a few weeks, the estimated payment on a $400K loan has decreased by over $100 per month. That savings can add up quickly, making homeownership more attainable.

While recent economic shifts have driven rates down faster than expected, market conditions remain fluid. If you’re holding out for even lower rates, consider the possibility that they could rise again. Taking advantage of the current dip may be a wise decision if you’re ready to make a move.

Bottom Line

With mortgage rates trending downward, buyers have a renewed opportunity to enter the market with improved affordability. If a lower monthly payment makes homeownership more feasible for you, now could be the right time to take action.

Would locking in a lower rate make buying a home more achievable for you?

For personalized guidance and expert advice, reach out to Mike Panza and the team at Panza Home Group today!