The housing market got its clearest break in years as the average 30-year fixed mortgage rate fell to 6.06% for the week ending Jan. 15, the lowest level since September 2022, according to Freddie Mac weekly data. The drop matters because housing has been frozen by a mix of high prices and high financing costs. Falling rates raise purchasing power quickly, even if home prices do not budge.
Early demand signals are responding. The Mortgage Bankers Association reported refinance applications up 40% week over week and purchase applications up 16%, with refis now 60% of total applications, per MBA application figures. CNN framed the math for buyers. On a $450,000 home with 20% down, monthly principal and interest would be about $2,172 at today’s average rate versus $2,405 a year ago, a savings of roughly $230/month, based on Freddie Mac’s comparison.
Still, the “lock-in effect” is only starting to thaw. Nearly 69% of mortgaged homes carry a rate of 5% or lower, and slightly more than half sit at 4% or lower, meaning many owners remain reluctant to trade up into higher rates, per Realtor.com outstanding-mortgage estimates. Meanwhile, prices remain sticky. December existing-home sales rose 5.1% month over month, but the median price was $405,400 and marked the 30th straight year-over-year increase, according to NAR’s December release.
For readers, the near-term question is whether sub-6.25% mortgages are enough to unlock more listings ahead of spring, or whether improved demand simply pushes prices higher again.
