The average 30-year fixed mortgage rate has fallen below 5.5% for the first time since early 2024, following signals from the Federal Reserve that additional rate cuts may be forthcoming. The decline has sparked renewed interest among prospective homebuyers who had been sidelined by elevated borrowing costs.
Mortgage lenders report a 22% increase in purchase loan applications over the past two weeks. Refinance activity has also picked up, though it remains below the levels seen during the historic low-rate period of 2020-2021.
Economists caution that further rate decreases will depend on continued progress in reducing inflation toward the Fed's 2% target.
