US mortgage rates have continued their downward trend, dropping for the sixth straight week to the lowest level since early December. According to the Mortgage Bankers Association (MBA), the average contract rate on a 30-year mortgage slipped 6 basis points to 6.67% during the first week of March.
The recent decline has sparked a resurgence of activity among home buyers and those looking to refinance their properties. The 15-year fixed mortgage rate also saw reductions, falling to 6.04%, the lowest it has been since October 2024. Notably, rates for jumbo loans—mortgages for properties sold for over $806,500—have reached their lowest point since late last year, now averaging 6.68%.
On March 12, 2025, the MBA reported these figures, indicating significant shifts within the US housing market as buyers respond to more favorable borrowing conditions. “Mortgage rates declined for the sixth consecutive week, with the 30-year fixed rate dropping to 6.67%, the lowest level since October 2024,” said Joel Kan, MBA economist. This substantial decrease has made now the time for many to enter the market.
The impact of falling rates is clear. Total mortgage applications surged by 11.2% week-over-week, driven significantly by refinancing. The latest figures highlight refinancing applications climbing by 16% from the previous week, reflecting the fact many homeowners with existing higher-rate mortgages are eager to capitalize on the current lower rates. Year-on-year, refinancing applications have spiked by 90%, indicating burgeoning interest from those who bought homes when rates were elevated just 12 months prior.
Home purchasing applications also increased by 7% for the past week, with applications registering 4% higher compared to the same timeframe last year. This rise points to greater consumer confidence as the spring homebuying season approaches, traditionally one of the busiest times for real estate activity.
Even FHA-backed loans have seen favorable conditions; these applications experienced an 11% increase, buoyed by the FHA mortgage rate now at 6.34%. Meanwhile, as home buyers rush back to the market, the average loan size is soaring—hitting $460,800, the highest recorded since the MBA began tracking it back to 1990.
While the mortgage rates are relatively flat moving forward, recent fluctuations noted by the Mortgage News Daily—where rates fell on Monday only to rise slightly on Tuesday—indicate these rates can shift rapidly. Observers will be keeping their eyes peeled for the upcoming Consumer Price Index release, which will provide insight on inflation and could potentially influence future mortgage rates.
Total loan volume remains comparatively low, yet the percentage increases are suggestive of significant shifts as more homeowners and buyers look to benefit from these lower rates. For those who secured their homes the last two years, the current environment presents compelling opportunities to refinance and reduce monthly payments.
Overall, the reduction of mortgage rates and the corresponding rise in applications forecasted to support increased momentum for the housing market, which may also contribute positively to the broader economy.
Home buyers are returning, lenders are witnessing more traffic, and as spring advances, the housing market appears poised for potential recovery. With both conventional and government loan categories witnessing heightened activity, experts remain optimistic about what lies ahead.