Mortgage Rates Hit 5.99% — Is Now the Time to Buy in Chicago?

In early January 2026, U.S. mortgage rates dipped to levels we haven’t seen in nearly a year — creating a buzz across the housing market and prompting many prospective buyers to ask the same question: Is now the right time to buy a home? Let’s break down what’s happening, why it matters, and how you can use this moment to your advantage.

Mortgage Rates: What’s Going On?

Over the past week, mortgage rates entered rare territory for the current cycle. According to multiple market reports, the 30-year fixed mortgage rate dipped as low as 5.99%, while average offers hovered below 6% in many lender surveys — a notable relief from mid-2025 levels when rates were often above 6.2%-6.3%.

More recent rate tracking shows that, even beyond the brief dip, many lenders are still offering competitive rates — with some credit unions advertising rates below 5.6% on the 30-year fixed and others clustered around the mid-6% range.

What this means for buyers: borrowing costs are lower than they’ve been in several months, and many home shoppers now qualify for rates comfortably under 6%, depending on credit and loan type.

Why Mortgage Rates Are Falling Right Now

A few key factors have helped push rates down this winter:

• Government Mortgage Support Initiatives

  A recent proposal to purchase billions in mortgage bonds helped buoy the market and contributed to rates slipping under that 6% threshold — the first time this has happened in nearly three years.

• Market Reaction & Treasury Yields

  Mortgage rates tend to follow long-term Treasury yields. When investors seek safe assets or expectations shift around inflation and economic growth, yields — and therefore mortgage rates — can move downward.

• Steady Federal Reserve Stance

  Despite some expectations for further policy action, the Fed has taken a cautious approach to cutting interest rates in early 2026 — keeping overall borrowing costs more stable and predictable.

Is Now the Time to Buy?

Here’s the real question every reader cares about:

Yes — Lower Rates Improve Affordability

With mortgage rates hovering near or below 6%, monthly payments become significantly more affordable compared to the higher rates many buyers were facing just a year ago. If you’re locking in a rate closer to 5.9–6.0%, you could save hundreds of dollars per month compared with rates in the 6.5–7% range.

But Timing the Absolute Bottom Isn’t a Winning Strategy

While rates dipped to 5.99%, they remain volatile. Market conditions — like economic data, inflation expectations, and federal policy — can push them slightly up or down week-to-week. Waiting for a perfectly “lowest possible” rate could mean missing out on current housing opportunities.

Seasonal Advantage: January Buyers Have Leverage

This time of year, buyer competition typically eases. Winter markets often mean sellers are more motivated and there’s slightly less competition — which can equate to better negotiation power and possible price savings.

What This Means for Chicago Buyers

If you’re shopping in Chicago or planning a move to the area with The Cory Tanzer Group, here’s how this plays out locally:

• Affordability Gains
  Lower rates stretch your purchasing power — allowing you to afford a larger home or more desirable neighborhood without increasing monthly payments.

• Buying Power vs. Competition
  Many buyers wait for spring, historically the busiest market. Entering now means less competition and potentially better pricing from serious sellers.

• Smart Strategy Beats Perfect Timing
  Rather than waiting on rates to dip another fraction of a percent, pairing a competitive mortgage with a strategic negotiation plan can yield real financial benefits today.

Takeaway: Rates Are More Favorable Than They’ve Been in Months

Mortgage rates recently approaching the 5.99% mark are a strong sign that conditions for buyers are improving — especially compared with last year’s higher rate environment. Whether you’re a first-time buyer, relocating to Chicago, or moving up to a larger home, the current landscape deserves attentive consideration.

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Ranked as a top 1% team in the Chicagoland market, Cory Tanzer and the Cory Tanzer Group specialize in the Chicago, North Shore, and Western Suburbs real estate market. With deep local market expertise and a proven track record, Cory and his team help clients buy and sell with clarity, confidence, and results.