Having a house remains prohibitive for many Americans, but experts think that a modest drop in mortgage rates could inject essential momentum in house sales and help revive the wider American housing market.
According to a recent analysis by the National Association of Realtors (Narrow), were mortgage rates to fall to 6%, 5.5 million additional households could afford a house, including 1.6 million tenants.
Why it matters
Affordability remains one of the key problems threatening the stability of the American housing market. As experts warned, the increase in the costs of purchasing a house – which have The property rates dragged to a post-pandemic hollow This year – are exacerbated by constantly high borrowing costs, preventing a large number of Americans from entering the real estate market.
Economists have recently indicated higher mortgage rates than Critical trail on the American housing marketAnd others nicknamed a possible decrease to 6% as a “magic” figure which would increase the number of Americans capable of buying.
What to know
According to Data from key organizations on housing and mortgage marketsIncluding the Deathgage Bankers Association (MBA) and the Federal Home Loan Mortgage Corporation (Freddie Mac), fixed mortgage rates of 30 years currently oscillate at around 6.75%.
Although these are lower than the levels observed in October 2023, when the rates of 30 years increased to around 8%, they are far from the bottom of less than 3% during the pandemic.
The prices have rejected the property out of reach for many. According to the report on Realtor.com housing market trends for June, the number of houses for sale in the United States has increased by almost 30% from one year to the next, marking the 20th consecutive month of increase. Zillow’s latest market report has also shown that housing stocks have reached a five -year summit in June.
In an aerial view, unified houses on April 19, 2025 in Thousand Oaks, California.
Images Kevin Carter / Getty
NAR’s research revealed that even a modest drop in rates to 6% would increase sales of houses by around 3% in 2025 and 14% in 2026. He added that around 10% of additional households who were now able to buy it would do it over 12 to 18 months.
According to the mortgage loan calculator News Daily, a rate of 6% on mortgages at 30 years would reduce monthly payment on a loan of $ 300,000 to $ 1,799, against $ 1,946 at today’s rates.
Nar said that Atlanta, Dallas, Minneapolis, Cleveland and Kansas City would see the greatest increase in home sales activity if the rates fell to 6%.
Susan Wachter, economist and professor of finance and real estate at the Wharton Business School of the University of Pennsylvania, said Nowsweek This 6% could prove “a magic mortgage number that pushes Americans to buy”.
However, she added that this will depend on the inflation management and the response of the federal reserve in the form of lower interest rate.
What people say
Alexei Morgado, real estate agent and founder of Lexawisesaid to Realtor.com: “Many of my clients tell me the same thing: they want to buy, but they believe that mortgage rates hold them.”
“And it’s not just about the number itself,” he continued. “What I hear most often is the fear of making a bad decision, of entering something that they cannot support or that will make them think later:” I rushed into it. “This feeling of paying more for the same thing is frustrating, discouraging and puts them on hold.”
Susan Wachter of The Wharton school of the University of Pennsylvania said Nowsweek:: “Six percent could be a magic mortgage number that pushes Americans to buy, but only if this happens because inflation decreases, lowering interest rates, without recession. Fear of buyers’ remorse in a slowdown in housing is the sidelining of buyers, including those who are newly eligible for a mortgage with rate reductions.”
The chief economist of Nar Lawrence Yun, Talk to real estate professionals At the forum of residential economic problems and trends last month, said: “Your old customers are all satisfied. But for new house buyers, their monthly payment obligation has increased, and this is what kills the housing market.
What happens next?
The chief economist of NAR, Yun, provides that mortgage rates will endure an average of 6.4% in the second half of 2025 and 6.1% next year.