Mortgage Rates Have Dipped Well Below Historical Norms


Home buyers who are delaying their purchase and holding out for lower mortgage rates may want to reconsider that strategy. The 30-year fixed-rate mortgage, which averaged 6.6% this week according to Freddie Mac, is still a far cry from the historical norm of 7.74%. Plus, mortgage rates are expected to slide further throughout the year.

Home buyers should be pleased with the continuing drop in mortgage interest rates,” says Jessica Lautz, deputy chief economist of the National Association of REALTORS®. She notes this week’s average for mortgage rates is the lowest in eight months.

At the current rate, the typical monthly mortgage payment on a $400,000 home—assuming a 20% down payment—is $2,044, Lautz says. That marks a savings of $257 per month compared to when mortgage rates were near 8% last October. “For potential home buyers, winter is often a time to set financial goals for the year ahead,” Lautz says. “If a home purchase is a financial goal on the horizon, this is the time to work on cleaning up the finances and finding a mortgage broker and a REALTOR® to help with that pursuit.”

The lower borrowing costs this winter are an “encouraging development for the housing market,” particularly for first-time home buyers who are sensitive to changes in borrowing costs and housing affordability, says Sam Khater, Freddie Mac’s chief economist.

Home buyers appear to be enticed by the lower rates: Mortgage applications to purchase a home—a gauge of future homebuying activity—continue to rise, jumping 9% in the latest week, the Mortgage Bankers Association reported Wednesday.

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 18:

  • 30-year fixed-rate mortgages: averaged 6.6%, dropping from last week’s 6.66% average. Last year at this time, 30-year rates averaged 6.15%.
  • 15-year fixed-rate mortgages: averaged 5.76%, falling from last week’s 5.87% average. A year ago, 15-year rates averaged 5.28%.



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