“Purchase demand is stronger than this time last year,” Khater said in the report. “This is an indication that a thaw in buyer activity could be on the horizon.”
Although the decline in mortgage rates has been modest, it has not gone unnoticed—especially by those who bought homes in late 2023, when rates were even higher.
Holden Lewis, a home and mortgage expert at NerdWallet, pointed out that homeowners who locked in mortgages above 7% last fall are now taking advantage of lower rates by refinancing.
“Mortgage rates have fallen four weeks in a row, but so gradually that you would think that scarcely any borrower would notice,” he said. “But borrowers who bought homes in fall 2023, when rates were well above 7%, have paid attention; we’re seeing a mild surge in refinances. With mortgage rates relatively stable, more would-be buyers might feel confident enough to test the market as home buying season begins.”
While the decline has sparked some optimism among potential buyers, affordability remains a challenge in many markets. Home prices continue to rise, and the Federal Reserve’s approach to interest rates remains uncertain.
