For the first time since September 2022, the average 30-year fixed-rate mortgage has fallen below 6%, hitting 5.98% this week according to Freddie Mac’s latest Primary Mortgage Market Survey — a psychologically significant milestone that could finally nudge hesitant buyers and locked-in homeowners back into action.

The decline follows three Federal Reserve rate cuts in 2025 and a direct intervention last month when President Trump ordered Fannie Mae and Freddie Mac — the government-sponsored enterprises that guarantee and package most U.S. mortgages — to purchase $200 billion in mortgage-backed securities. The increased secondary-market demand has allowed lenders to offer lower rates to borrowers.

Real estate experts say the sub-6% threshold matters more for sentiment than raw savings. Many homeowners with pandemic-era rates near 2.5–3% have refused to move, fearing a jump to 7%+ payments. Would-be buyers, meanwhile, sat on the sidelines during the 2023 peak of 7.8%. Kate Wood, housing expert at NerdWallet, explained the potential tipping point: “There are people who are certainly going to reach that breaking point of ‘I love my mortgage rate, but my goodness, I cannot stand this house anymore.’”

Mortgage applications rose 2.8% in the week ending Feb. 13 (Mortgage Bankers Association data), but the increase was driven entirely by refinancing — purchase loans actually fell, signaling the broader housing market remains largely frozen.

While four years of elevated rates shaved home prices modestly, affordability remains strained. The median U.S. home sale price ended 2025 at $405,000, and a severe supply shortage continues to dominate. Realtor.com’s latest report warns that without a surge in new construction or existing-home listings, a wave of buyers triggered by lower rates could drive prices sharply higher — wiping out affordability gains.

Senior economist Jake Krimmel at Realtor.com cautioned: “If you don’t add supply to the market, either in the form of new construction or existing homes from new listings, you’re going to see that demand increase turn into price increases.”

Homebuilders remain pessimistic, citing high construction costs and regulatory hurdles as barriers to ramping up inventory. Until supply catches up, lower mortgage rates may provide relief for some but risk inflating already elevated home values.