Mortgage Rates Drop To Lowest Levels Since December, But Housing Market Remains 'Largely Stuck'

Mortgage rates are coming down to the lowest levels since last December, but demand for home loans has stalled. Here's a look at what the experts are forecasting for the year ahead. 

What To Know: The average interest rate for 30-year fixed-rate mortgages continued to decline to 6.88% in the week ended Feb. 21, down from 6.93% in the previous week. According to the Mortgage Bankers Association, last week's average rate marks a new low since December 2024 and compares to 7.03% from the same period last year. 

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"Treasury yields moved lower on softer consumer spending data as consumers are feeling somewhat less upbeat about the economy and job market. This pushed mortgage rates lower, with the 30-year fixed rate decreasing to 6.88 percent, the lowest rate since mid-December," said Joel Kan, MBA's Vice President and Deputy Chief Economist. 

Though mortgage rates are slowly coming down, demand for home loans remains weak. MBA data show applications to refinance a home loan fell 4% for the week and existing home sales in the U.S. sank by 4.9% in January, the sharpest decline in seven months. 

Analysts at JPMorgan Chase & Co. (NYSE:JPM) see the housing market to remain "largely stuck" through 2025 as interest rates and home prices both remain high. 

"The situation is not going to change until we get mortgage rates back down toward 5%, or even lower," said John Sim, head of Securitized Products Research at J.P. Morgan.

"And we aren't forecasting mortgage rates to breach 6% in 2025 — they should ease only slightly to 6.7% by the year end," Sim added. 

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