Mortgage rates in the United States have dipped to their lowest this year, a small win for homebuyers. The Mortgage Bankers Association reported today that the average 30-year fixed rate fell to 6.88% for the week ending February 21, down from 6.93% the week prior.

This marks five weeks of declines, hitting the cheapest level since mid-December 2024. Treasury yields are softening as inflation hints at cooling, yet the housing market isn’t leaping to life. Mortgage applications dropped 1.2% week-over-week, showing buyer hesitance.

High home prices and economic uncertainty are the culprits, analysts say. Refinancing edged up slightly, but demand overall stays sluggish—median home costs still outstrip wages, dulling the rate drop’s shine.

Forecasts suggest rates might hit 6.5% by year-end if the Federal Reserve’s steady hand persists. Some urge locking in now, with trade policy shifts looming as a wildcard. For now, it’s a cautious market—better rates, no boom.