Mortgage Rates Recently Hit a 3-Year Low. Here’s Why That’s Still a Big Deal.

If you’re one of the thousands of homebuyers waiting for rates to fall, you should know it’s already happening. And they recently crossed an important milestone. Rates officially dipped their toes into the 5s – something that hasn’t happened in about 3 years for some borrowers, depending on loan type, credit profile, and market conditions.

This moment marked a critical threshold. Now, rates are sitting in the low 6% territory. And expert forecasts project they’ll hover near this range throughout the year-though rates can always move and vary by situation.

Here's why it matters.

Why Current Rates Are Such a Big Deal

A mortgage rate doesn’t just affect the interest you end up paying on your home loan. It shapes your entire buying experience.

When rates were up around 7% just one year ago, a lot of buyers felt priced out. Payments were higher. Budgets felt tighter. Affordability was a bigger challenge. That’s especially true for first-time homebuyers, who felt the biggest pinch.

But according to industry experts, that’s starting to change now that rates are slowly inching down. Let’s break down why.

Right now, borrowing costs are in their lowest range in almost 3 years (Source: https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed, 2026) . And for many buyers, that can open up more options depending on peroneal finances and loan qualifications. 

At around 6% or below, you may notice:

• A lower interest rate that could lead to lower monthly payments.
• More buying power, thanks to the extra breathing room in your budget.

In other words, you may now be able to make a stronger offer, purchase in a different location, or buy a home that checks more of your boxes. And that feels like a big shift compared to when rates were at 7%.

This Opens the Door for 550,000 Buyers

To drive home just how much this helps potential homebuyers like you, consider this research from the National Association of Realtors (NAR). It shows that when mortgage rates sit around this level, millions more households can afford a home. When rates are at 6% or below:

• 5.5 million more households can afford the median-priced home
• And roughly 550,000 of those people will likely buy a home within 12 to 18 months depending on individual circumstances 

That means that many homebuyers are possibly getting the green light they’ve been waiting for. Now may be the time to get ahead and buy before more people notice the game has just changed.

Because whether rates stay in the low 6s or dip back down into the upper 5s, the math is already working in your favor. And the difference from a low 6% to a high 5% isn’t as big as you may think. But the difference from 7% to 6%? That is very much a big deal, and it’s a number that’s already working in your favor.

Bottom Line

For many buyers, where rates are now could be the difference between watching from the sidelines and finally getting the keys to their next home.

Get pre-approved and run your numbers with a First Federal Bank Loan Officer is today.