Mortgage rates plummeted Thursday to their lowest level since September 2022 following a drop in the 10-year Treasury yield triggered by a cooler-than-expected January inflation reading and a relatively strong jobs report.
The average rate on 30-year fixed home loans fell to 6.01% for the week ending Feb. 19, down from 6.09% the week before, according to Freddie Mac. For perspective, rates averaged 6.85% during the same period in 2025.
“Mortgage rates dropped again this week, now down to their lowest level since September of 2022,” said Sam Khater, Freddie Mac’s chief economist. “This lower rate environment is not only improving affordability for prospective homebuyers, it’s also strengthening the financial position of homeowners. Over the past year, refinance application activity has more than doubled, enabling many recent buyers to reduce their annual mortgage payments by thousands of dollars.”
On Tuesday, the 10-year Treasury yield, which mortgage rates closely track, fell to its lowest level since late November 2025, but Realtor.com® senior economist Jake Krimmel warns that the resulting decrease in borrowing costs could prove short-lived.
According to newly released minutes from last month’s Federal Open Market Committee (FOMC) meeting, some Federal Reserve policymakers remain hawkish and open to future interest rate increases if inflation does not continue to recede toward their 2% target.
The January meeting ended with a 10-2 vote to keep the overnight rate unchanged at a range of 3.5% to 3.75% after three consecutive reductions.
Krimmel points out that while the Freddie Mac rate hitting a 3.5-year low comes during a seasonal lull, it effectively sets the stage for the spring homebuying market.
“We are already seeing ‘green shoots’ in demand, with pending home sales up 1.2% year over year in January, the strongest increase since late 2024,” says the economist.
House hunters will be hoping they do not see a repeat of 2025, when economic uncertainty—fueled by President Donald Trump‘s tariff policies—pulled the rug out from under them by pushing rates higher heading into the busy buying season, reaching 6.89% in May.
“There is a chance to be nearly a full percentage point lower than that this spring, which would meaningfully boost purchasing power,” says Krimmel.
However, supply of for-sale homes continues to lag, with new construction in 2025 finishing behind 2024 and inventory growth losing steam.
“Without a significant return of supply through the easing of the mortgage ‘lock-in effect,’ lower rates may simply reignite competition and spike prices, erasing the affordability relief buyers are hoping for,” cautions Krimmel.
Mortgage rates are determined by a delicate calculus that factors the state of the economy and an individual’s financial health. They are most closely linked to the 10-year Treasury bond yield which reflects broader market trends, like economic growth and inflation expectations. Lenders reference this benchmark before adding their own margin to cover operational costs, risks, and profit.
When the economy flashes warning signs of rising inflation, Treasury yields typically increase, prompting mortgage rates to increase. Conversely, signs of falling inflation or weakness in the labor market usually send Treasury yields lower, causing mortgage rates to fall.
The mortgage rates you’re offered by a lender, however, go beyond these benchmarks and take some of your personal factors into account.
Your lender will closely scrutinize your financial health—including your credit score, loan amount, property type, size of down payment, and loan term—to determine your risk. Those with stronger financial profiles are deemed as lower risk and typically receive lower rates, while borrowers perceived as higher risk get higher rates.
Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you’ll receive. The higher the credit score, the lower the interest rate you’ll qualify for.
The credit score you need will vary depending on the type of loan. A score of 620 is a “fair” rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.
Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates.
Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. They want to make sure you’re able to pay back the loan.