Mortgage rates have fallen below 6% for the first time in more than two years—a psychological and financial milestone that could begin to thaw a housing market frozen by a prolonged high-rate era.
The average rate dipped to 5.98% this week, its lowest level since September 2022. For buyers, that drop translates into meaningful savings: Compared with a year ago, today’s rates shave roughly the equivalent of one full monthly mortgage payment off annual housing costs—savings that compound year after year.
The move below 6% won’t instantly erase the market distortions created over the past four years. Roughly 70% of existing mortgage holders still have rates below 5%, meaning many homeowners remain “locked in” to cheaper loans and are reluctant to sell.
But, the rate dip could meaningfully affect marginal and discretionary buyers—the group that largely stepped to the sidelines as borrowing costs surged. And while we won’t see the impact in February home sales, there could be movement in home sales as we move into March and April.
During the high-rate stretch, the housing market recalibrated in unexpected ways. Instead of home prices falling sharply to restore affordability, sales volume collapsed. Transactions sank to 30-year lows as inventory stayed tight and prices remained elevated.
The buyers who did transact were often “buyers of necessity”—people relocating for work, family changes, or other life events—and they proved far less price-sensitive. Meanwhile, discretionary movers, who are typically both sellers and buyers, stayed put.
Migration patterns persist despite the high-rate era
One lasting shift from the high-rate era has been the rise in out-of-market home shopping.
More than 3 in 5 online views of homes in the nation’s 100 largest metros now come from shoppers located outside that market—up from roughly half in 2019. While that share has eased slightly from last year’s peak, it remains historically elevated.
Sun Belt markets and metros adjacent to New York City continue to attract the highest levels of out-of-market interest. Meanwhile, areas tied to artificial intelligence and tech-sector growth have seen some of the largest relative increases in cross-market shopping over the past six years.
Prices soften in Sun Belt states
Fresh data released this week underscores a broader cooling in home price growth, though trends vary widely by region.
Recent Case-Shiller data showed prices still rising in supply-constrained Northeast and Midwest metros such as Chicago, New York City, and Cleveland. But several Sun Belt markets saw declines at the end of 2025, including Tampa (-2.9%), Denver (-2.1%), Phoenix (-1.5%), Dallas (-1.5%), and Miami (-1.5%).
The most recent weekly data from Realtor.com suggests that price softness continues nationally, even as active inventory growth remains moderate.
Encouragingly for buyers, new listings rose for a second consecutive week—a signal that sellers may be responding to rate relief as well.
This is the statistic that should be most closely watched in the weeks ahead, because it is a key indicator of whether the market will meaningfully thaw this spring.