Mortgage rates dropped this week after consumer confidence turned sharply negative, raising new fears about an economic slowdown.
The average 30-year mortgage rate fell to 6.76%, for the week through Wednesday, from 6.85% a week earlier. 15-year mortgage rates dropped to 5.94%, from 6.04%.
“The drop in mortgage rates, combined with modestly improving inventory, is an encouraging sign for consumers in the market to buy a home,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
Read more: Mortgage and refinance rates today: Feb. 27, 2025
The moves follow a sharp decline in Treasury yields on Tuesday after consumer confidence data showed the biggest drop in nearly four years, spurring investor concerns about the health of the economy.
Consumers have grown more worried about inflation amid uncertainty around President Donald Trump’s tariff policies and spiking egg prices stemming from avian flu-related shortages.
This week’s change was the most dramatic single-week move in mortgage rates so far this year. Since January, mortgage rates have gradually drifted lower but were stuck in a narrow band between 6.85% and 7.03%.
The higher rates last month kept many buyers sidelined throughout the market’s seasonal slow period. A measure of housing contract activity for January dropped 4.6% from December to the lowest level on record, according to the National Association of Realtors.
Read more: 2025 housing market — is this a good time to buy a house?
So far buyers haven’t responded much to lower rates in February. Applications to purchase a home were flat through Friday compared to a week earlier, according to the Mortgage Bankers Association, and refinancing applications fell 4%.
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Claire Boston is a senior reporter for chof360 Finance covering housing, mortgages, and home insurance.
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