Mortgage rates have fallen to their lowest level in two months, averaging 6.85% for a 30-year fixed-rate mortgage, according to Freddie Mac. However, despite the decrease, buyers are still hesitant to enter the market.
The recent drop brings rates back to where they were at the end of 2024. Despite this, home sales have not seen any significant increase. In fact, the number of homes under construction declined in January, according to government data.
Economists predict that the housing market will remain challenging in 2025 due to high mortgage rates and decreased builder sentiment. The National Association of Home Builders reported a five-month low in February for builder sentiment.
Buyers are facing tight conditions across the country. Real estate agents like Pamela Grunstein, who works in Westchester County, New York, are navigating markets with limited supply. With only 1.6 months of inventory available, buyers must often waive contingencies and bid aggressively to secure a property.
Mortgage applications for home purchases have also seen a decline, dropping 6% from the previous week according to the Mortgage Bankers Association. The high interest rates are making it even more challenging for buyers to enter the market.
Source: https://eu.usatoday.com/story/money/personalfinance/real-estate/2025/02/20/mortgage-rates-at-two-month-low-but-homes-pricey/79191001007