30-Year Mortgage Rates Fall 84 Basis Points, Lowest Level in Over 3 Years

Mortgage Rates Reach Their Lowest Point in Over Three Years

Mortgage rates have moved lower again, reaching the lowest level seen since 2022 and signaling a meaningful shift for buyers and sellers entering the 2026 housing market. According to the National Association of REALTORS®, the average 30-year fixed mortgage rate dropped to approximately 6.01 percent, down from levels near 6.85 percent one year ago. This represents a decline of about 84 basis points, creating improved affordability conditions compared to recent years.

Lower borrowing costs are beginning to reshape housing market dynamics, offering renewed opportunities for buyers while also creating momentum that could influence seller activity heading into spring.

Why Mortgage Rates Are Falling

Several economic factors are contributing to this decline in mortgage rates. Cooling inflation data and changing expectations around interest rates have helped ease pressure on long-term borrowing costs. Mortgage rates are closely tied to bond yields and broader economic forecasts, meaning improvements in economic stability often translate into lower financing costs for homebuyers.

While rates are still higher than the historic lows seen earlier in the decade, the recent movement toward the 6 percent range represents a notable shift that many buyers have been waiting for.

More Buyers May Now Qualify for a Home Loan

Lower rates significantly impact affordability. NAR estimates that millions of households could now qualify for a mortgage compared to when rates were closer to 7 percent, including many renters who may be able to transition into homeownership.

Even small changes in mortgage rates can have a measurable impact on monthly payments. For buyers, this means:

• Increased purchasing power

• Potentially lower monthly payments

• Greater flexibility when searching for homes

As affordability improves, market analysts expect more buyers to gradually re-enter the market, especially as spring inventory begins to grow.

Refinancing Activity Is Increasing Again

The decline in rates is also influencing homeowners who purchased or refinanced during higher-rate periods. Recent data shows refinancing activity rising as borrowers look to reduce monthly payments and improve long-term financial flexibility.

This trend could lead to increased housing mobility as homeowners feel more comfortable making moves they previously delayed due to financing costs.

Market Outlook Moving Forward

Housing economists expect mortgage rates to remain relatively stable near current levels throughout 2026, supporting a more balanced housing market compared to the volatility seen in recent years.

Rather than a sudden surge, experts anticipate gradual increases in activity as affordability improves and both buyers and sellers adjust to the new environment.

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Ranked among the top 1% of real estate teams in the Chicagoland market, Cory Tanzer and the Cory Tanzer Group are experts in helping buyers and sellers navigate today’s market across Downtown Chicago, the North Shore, and the Western Suburbs. Recognized for their neighborhood expertise in areas like University Village, University Commons, South Loop, and Pilsen, the team helps clients stay one step ahead by understanding where the Chicago market is moving next.