U.S. Mortgage Rates Drop, Refinancing Surges Nationwide

U.S. mortgage rates have recently experienced their largest decline since February 2025, with the 30-year fixed mortgage rate dropping to around 6.67% and the 15-year rate falling below 6% for the first time in months. This decline is attributed to weaker employment reports and economic data suggesting a softening job market, which has raised expectations of a Federal Reserve rate cut. The lower rates have spurred a notable increase in refinancing activity, with the Mortgage Bankers Association reporting a 23% rise in their refinancing index. Despite these improvements, high mortgage rates and rising home prices continue to challenge affordability, keeping home purchase activity near a 15-year low. Experts advise that refinancing into a 15-year mortgage can offer savings on interest costs if borrowers can afford higher monthly payments and find competitive rates. However, the overall impact on refinancing volume may be limited since many homeowners locked in low rates prior to recent Fed tightening and not all borrowers prepay mortgages even when beneficial.