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Average US long-term mortgage rate hits the lowest point in more than 3 years

By The Associated Press

The average long-term U.S. mortgage rate is now down to its lowest level in more than three years.

The benchmark 30-year fixed rate mortgage rate eased to 6.06% this week, down from 6.16% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the rate averaged 7.04%.

The last time the average rate was lower was Sept. 15, 2022, when it was at 6.02%.

Meanwhile, borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell this week, dropping to 5.38% from 5.46% last week. A year ago, that average rate was at 6.27%, Freddie Mac said.

Lower mortgage rates boost homebuyers’ purchasing power, good news for home shoppers at a time when the housing market remains in a deep slump after years of soaring prices and elevated mortgage rates have shut out many aspiring homeowners.

Uncertainty over the economy and job market are also keeping many would-be buyers on the sidelines.

Mortgage rates began easing in July in anticipation of a series of Fed rate cuts, which began in September and continued last month.

The Fed doesn’t set mortgage rates, but when it cuts its short-term rate that can signal lower inflation or slower economic growth ahead, which can drive investors to buy U.S. government bonds. That can help lower yields on long-term U.S. Treasurys, which can result in lower mortgage rates.

The pullback in mortgage rates helped drive sales of previously occupied U.S. homes higher on a monthly basis the last four months of 2025. Even so, home sales remained stuck at a 30-year low last year, extending the housing market’s slump into its fourth year.

Lower mortgage rates have been helpful for home shoppers who can afford to buy at current rates. The median U.S. monthly housing payment fell to $2,413 in the four weeks ending Jan. 11, according to Redfin. That’s a 5.5% drop from the same period a year earlier and near the lowest level in two years.

The latest drop in rates comes after President Donald Trump announced last week that the federal government would buy $200 billion in mortgage bonds in a bid to reduce mortgage rates.

Lower rates spurred a sharp increase in homeowners seeking to refinance their existing home loan to a lower rate last fall, a trend that has continued into this year.

Applications for mortgage refinancing loans soared 40% last week from the previous week and accounted for 60% of all home loan applications, according to the Mortgage Bankers Association. Applications for loans to buy a home climbed 16%.

“With mortgage rates much lower than a year ago and edging closer to 6%, MBA expects strong interest from homeowners seeking a refinance and would-be buyers stepping off the sidelines,” said MBA CEO Bob Broeksmit.

Economists generally expect mortgage rates to ease further this year, though most recent forecasts show the average rate on a 30-year mortgage remaining above 6%, about twice what it was six years ago.

Still, rates would have to drop considerably for homeowners, who bought or refinanced when mortgage rates hit rock bottom earlier this decade, to take on a new loan at a far higher rate.

Nearly 69% of U.S. homes with an outstanding mortgage have a fixed-rate of 5% or lower, and slightly more than half have a rate at or below 4%, according to Realtor.com.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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