Mortgage rates fell to lowest level in 3.5 years: A closer look

Yahoo Finance Video

Fri, February 27, 2026 at 7:24 AM GMT+9

In this video:

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-4.19%

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According to the newest Freddie Mac (FMCC) data, US mortgage rates fell to 5.98% — their lowest level in over three years.

Yahoo Finance Senior Reporter Claire Boston sits down with Market Domination Overtime host Josh Lipton to explain why rates have been declining, what lower rates mean for housing demand, and the potential ripple effects for homebuilders and the resale market.

To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime.

Video Transcript

00:00 Speaker A

The 30-year fixed mortgage rate has fallen to its lowest level in three and a half years. That’s according to the latest weekly data from Freddie Mac. The 30-year rate has now dropped to 5.98%. Yahoo Finance is Clare Ballentine joining me on the latest of the housing market. Clare, so big picture, let’s start there. What what does this mean Clare broadly for housing demand?

00:34 Clare Ballentine

Yes, so we have been waiting for this moment for quite a long time. We have been hanging out at 6%. And a lot of people say that there is a real psychological power for buyers when we get rates that are more like a five and a half, you know, 5.98. So, I think that as we head into spring, this could potentially help bring some buyers off the sidelines who are just waiting for these lower rates.

00:59 Speaker A

And why have mortgage rates been falling? Like what explains that? What are the what are the puts and takes, the variables?

01:09 Clare Ballentine

Yeah, so mortgage rates have been moving lower for quite a bit of time. Some of that is uh just the result of economic, the economic picture as well as factors like Trump’s bond buying. But what we saw this past week that got us below 6% was really a story about market volatility. We had that Supreme Court tariffs ruling. There was a bit of just like market jitters and as a result, uh people said, okay, flight to quality, we’re going to buy treasuries, that pushed yields down, and treasury yields and mortgage rates are really heavily related. So that helped bring mortgage rates a little lower.

01:38 Speaker A

And what does this mean also Clare for for home builders and housing supply? What are the ripple effects there?

01:45 Clare Ballentine

Definitely. So, home builders are in a tough place. Uh their sentiment is very, very poor right now. They’re dealing with this environment where they have built a lot of homes and people really can’t afford to buy them in part because mortgage rates are high. So, lower mortgage rates do help, but that being said, you know, we’re at 5.98, we are not at 3%. This is a step in the right direction, but it will not reverse these really challenging market trends that we’ll see. Uh you know, that being said, sometimes if you’re looking at the resale market, seeing lower rates might convince some sellers, okay, maybe I’ll try to list my home, you know, maybe buyer demand will be there. So that is a little bit of good news heading into the sort of spring home buying season.

02:30 Speaker A

All right, Clare, thank you. Appreciate it.

02:32 Clare Ballentine

Thank you.

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