The average rate on a 30-year fixed mortgage in the United States slipped to 5.99% on Monday, according to Mortgage News Daily, matching the lowest reading seen since 2022.
This retreat in mortgage pricing followed a stock market sell-off that prompted investors to seek the relative safety of bonds. As demand for bonds rose, yields fell and mortgage rates moved downward in tandem. By comparison, the 30-year rate was 6.89% a year earlier.
Market participants and analysts point to several factors behind the drop in yields. Mortgage News Daily cited a mix of renewed uncertainty around tariffs, a moderation in inflationary pressures and evidence of economic softness flagged in a GDP report published on Friday as contributors to the move.
Matthew Graham, chief operating officer at Mortgage News Daily, characterized the current rate environment as more durable than a brief dip into the 5% range seen in January. "This visit to the high 5's looks more sustainable on paper," Graham said. He added that unless the broader bond market experiences a substantial sell-off, mortgage rates have a better chance of remaining near current levels than during the previous decline. Graham also noted a conditional path for further rate improvement: "And if the broader bond market improves further (i.e. 10yr yields dipping under 4.0%), mortgage rates would likely make incremental gains."
Refinancing activity has already shown a meaningful lift. The Mortgage Bankers Association reports that applications to refinance a home loan are about 130% higher than they were a year ago. The recent fall in mortgage rates is expected to sustain and possibly accelerate that trend, building on an uptick in refinance submissions over the past several weeks.
For homeowners, lenders and housing-market participants, the combination of lower mortgage rates and rising refinance applications could influence borrowing costs and cash flow decisions in the near term. At the same time, the trajectory of rates remains tied to movement in the broader bond market and to macroeconomic signals that continue to evolve.
Key points
- The average 30-year fixed mortgage rate fell to 5.99% on Monday, the lowest since 2022.
- Yields declined after a stock market sell-off pushed investors into bonds; the 30-year rate was 6.89% a year ago.
- Refinance applications are roughly 130% higher year-over-year, suggesting more homeowners may act on lower rates.
Risks and uncertainties
- A renewed sell-off in the broader bond market could reverse recent declines in mortgage rates, impacting the housing and mortgage-lending sectors.
- Ongoing uncertainty around tariffs and the potential for evolving inflation trends or additional weak economic data could push yields higher again, with implications for borrowing costs across consumer finance and housing markets.