Thirty-year mortgage rates fell to 6.196% this week, a small drop from 6.201% the previous week, according to U.S. News data. Mortgage rates have generally been dropping steadily since the start of the year.
On Feb. 26, mortgage rates fell below 6% for the first time since 2022, according to Freddie Mac data. Those sub-6% rates were short-lived, though, as the Iran conflict pushed rates higher.
For the week ending Feb. 27, mortgage applications increased 11% from the week before, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
“Mortgage applications increased last week, driven by continued strength in refinance activity, as mortgage rates stayed near their lowest level since 2022,” said Joel Kan, MBA’s vice president and deputy chief economist. “Refinance applications increased for the fourth straight week to the strongest pace since 2022.”
Housing Inventory Is Picking Up but Remains Sluggish
Even as mortgage rates fall, buyers may be hesitant to enter the market. That’s due not just to elevated home prices but also to limited inventory.
The good news is that real estate inventory seems to be picking up. The bad news is that it’s increasing slowly.
There were 27.5% more homes actively for sale on a typical day in February 2026 compared with February 2024, according to Realtor.com’s Monthly Housing Market Trends Report. That marks the 16th consecutive month of annual inventory growth.
February inventory also increased at a faster pace than in January, when real estate inventory was up only 24.6% year over year. But while inventory may be picking up, it’s still down 22.9% compared with typical 2017 to 2019 levels.
Still, winter is typically a slow time for home listings. With mortgage rates dropping and warmer weather on the horizon, we could soon see a notable increase in homes for sale. And if inventory picks up, we could start to see prices cool down as buyers are presented with more choices.
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Price Cuts May Be Coming Regardless
Even if housing inventory stalls this spring, sellers may soon opt to reduce prices due to a slowdown in demand.
In February, the typical home spent 66 days on the market, according to Realtor.com. That’s an increase of five days year over year. The fact that homes are taking longer to sell could soon start working in buyers’ favor.
Realtor.com also reported that the share of homes with price reductions in February increased 2.2 percentage points year over year. Furthermore, the overall share of homes with price cuts was higher than in any February since 2016.
If homes continue taking longer to sell, more price reductions could be on the way. That, combined with modestly lower borrowing rates, could push more buyers into the market.
On the flip side, the Iran war, combined with general economic uncertainty, could keep skittish buyers sidelined well into spring, especially if upcoming jobs data is overwhelmingly negative. Even if mortgage rates continue to slide, affordability concerns could continue to keep buyers out of the market for the foreseeable future.
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Mortgage Rates Continue to Dip in Early March originally appeared on usnews.com
