MW Mortgage rates fall to lowest level in over 3 years as home-buying activity picks up

By Aarthi Swaminathan

It's a major shift from where rates were a year ago: Last January, the 30-year rate averaged 7.04%

Mortgage rates are at a three-year low - welcome news for aspiring buyers who've been on the sidelines of the housing market.

Mortgage rates fell to the lowest level in over three years, offering a window of opportunity for many frustrated home buyers.

The 30-year fixed-rate mortgage fell 10 basis points and averaged 6.06% as of Jan. 15, according to housing-finance giant Freddie Mac's (FMCC) weekly report.

That's a major shift from where rates were a year ago. Last January, the 30-year rate averaged 7.04%.

The average 30-year rate is now at the lowest level since September 2022.

Recent drops in mortgage rates have been prompted in part by President Donald Trump's announcement that he was directing "representatives" to purchase $200 billion in mortgage-backed securities.

High mortgage rates and record-high home prices have been obstacles for buyers, pushing the median age of a first-time home buyer to a record high of 40 in 2025, according to the National Association of Realtors.

The drop in rates sparked a boost in home-buying and refinance activity. People who have been on the sidelines of the housing market jumped in to either lock in a better rate to buy a house, or to refinance an existing loan with a much higher rate.

There's been another notable shift in real estate: The share of homeowners with a mortgage rate over 6% has now surpassed the share of homeowners with a sub-3% rate. That suggests that the so-called lock-in effect is easing.

Read more: Homeowners and home buyers race to lock in falling mortgage rates

"It's clear that housing activity is improving and poised for a solid spring sales season," Freddie Mac's chief economist, Sam Khater, said in a statement.

"After a long stretch of affordability challenges, this dip in rates has helped reignite momentum and positioned the market for a stronger spring," Samir Dedhia, CEO of One Real Mortgage, said in a statement.

"With rates nearly a full point lower than this time last year, and home price growth stabilizing, many are seeing a window to lock in value," he added.

Related: Here's how much money you need to make to afford a $400,000 home

-Aarthi Swaminathan

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January 15, 2026 12:48 ET (17:48 GMT)

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