Are Lower Mortgage Rates Enough to Lure Spring Buyers?

For the week ending April 6, the interest rate for a 30-year, fixed-rate home loan averaged 6.28%. And while that’s higher than the average 4.72% rate one year ago, it’s down from the 20-year high reached at the end of 2022, Realtor.com reports. A small drop in borrowing costs is good news for homebuyers who have been waiting to make a move in the for-sale market, but many challenges remain for spring house hunters.

For one, listing prices are still inching higher, and along with declining housing affordability, the week ending April 1 marked the 39th straight in which fewer homeowners listed their homes for sale.

“Compared to the recent 7% average rate peak, the latest rate saves $140 per month for a homebuyer on a $300,000 loan,” says National Association of Realtors® Chief Economist Lawrence Yun, who is optimistic that rates will continue this downward trend.

“Buyer demand tends to be sensitive to mortgage rate changes, increasing with each downward tick in rates,” adds Realtor.com economist research analyst Hannah Jones. “We can expect to see a similar bump in housing activity as a result of the recent drop in mortgage rates.”

However, Jones points out, “Despite these pick-ups in demand, by and large, the housing market remains unaffordable for many would-be buyers.”

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