Daily mortgage rates dip to 5.99%

Key takeaways

• The 30-year, fixed-rate mortgage dipped to 5.99% on Monday — its first time below 6% since September 2022.
• The decline reflects a gradual, sustainable improvement in the bond and mortgage-backed securities markets, rather than a reaction to a single economic headline, according to Mortgage News Daily.
• The National Association of Realtors estimates that lower mortgage rates could bring an additional 550,000 homebuyers to the market this year.

The 30-year, fixed-rate mortgage fell below 6% for the first time in nearly three-and-a-half years.
As of Monday afternoon, Mortgage News Daily reported a 5.99% rate, down five basis points from Friday. The 15-year, fixed-rate mortgage was unchanged at 5.6%.

It's the first time since September 2022 that the 30-year rate has been in the 5% range, a change that could save borrowers hundreds of dollars a month.

Unlike other recent mortgage rate lows, Monday's decrease was the result of a "gradual and...sustainable" change, according to Matthew Graham, chief operating officer at Mortgage News Daily.

"There's no new news causing the improvement," he wrote in a blog post. "The broader bond market has gradually improved to the best levels since November and the mortgage-backed securities market (the bonds that directly dictate mortgage rates) have performed better than normal."

The mortgage market tracks closely with the bond market, which has been trending positive for the last few months.

That's partly because investors are "looking for a safe haven" amidst economic and geopolitical uncertainty, and bonds are generally considered a more prudent investment, according to Dan Frio, a lender with PBT Bancorp in Kentucky.

Monday's rate could save some borrowers up to hundreds of dollars on their monthly payments — but more than that, just seeing a five could have psychological implications for both homebuyers and refinancers.

"It's like a light switch," Frio said.

Indeed, the 2020s have been a sort of game of tug-of-war between lenders and borrowers. On one side, borrowers are holding out hope for lower mortgage rates like those seen at the start of the decade during the COVID-19 pandemic. On the other hand, lenders and experts insist that those low borrowing costs were a blip unlikely to ever be seen again.

That said, a 5% rate could pull some homebuyers off the sidelines. It could also provide significant savings for homeowners sitting on a 7% or higher rate.

Last week, Lawrence Yun, chief economist at the National Association of Realtors, noted that an additional 5.5 million households that couldn't afford a mortgage last year could now qualify at today's lower rates.

"Most newly qualifying households do not act immediately, but based on experience, about 10% could enter the market — potentially adding roughly 550,000 new homebuyers this year compared with last year," he said in a statement Thursday.

Still, it's important that borrowers evaluate their options before making a decision, according to Brad Case, chief residential economist at Homes.com.

"Borrowers need to know that they may be able to do even better simply by contacting several lenders or mortgage brokers and asking which rate they’re willing to offer," he said in an email. "Shopping around can give you a better interest rate than the average — so, for example, maybe you could get 5.88% instead of 5.99%."

Frio added that borrowers should also pay close attention to their actual fees, not just the rate.

"A lower rate doesn't always mean lower payments," he said.