Will 6% mortgage rates create more opportunities for homebuyers?

Mortgage rates have been trending toward the low 6s for several months, giving homebuyers some relief amid affordability challenges, but maybe less relief than they expected after the Federal Reserve cut interest rates last week.

Mortgage News Daily reported Monday that the 30-year fixed rate of 6.34% was the highest level in three weeks. That came on the heels of last week’s rate cut and comments by Fed Chair Jerome Powell that another rate cut in December was “not a foregone conclusion.”

On Tuesday, data at HousingWire’s Mortgage Rates Center, which tracks locked rates across all credit profiles, showed that rates for 30-year conforming loans averaged 6.27%, down 2 basis points from one week ago.

Rates for 30-year loans through the Federal Housing Administration (FHA) fell 3 bps during the week to an average of 6.10% on Tuesday, while 30-year jumbo loans rates were down 2 bps to 6.16%. Both figures represented year-to-date lows. HousingWire’s data included rates for locked loans across all credit profiles.

Phil Crescenzo Jr., Southeast division vice president for Nation One Mortgage Corp., said that stable rates near 6% are poised to unlock greater affordability for millions of U.S. households.

He pointed to data published over the summer by the National Association of Realtors (NAR), which showed that a 6% rate would make the median-priced home affordable to an additional 5.5 million households. NAR estimated that 10% of these households would buy a home in the next 18 months if rates reached 6%.

“I have seen some activity with the recent rate reductions, but not a rapid pace,” Crescenzo told HousingWire via email. “I believe if someone has a 3% mortgage rate, a rate that at least starts with a 5 does not seem as drastic. This actually does move people more than the actual savings of another .125% in a long-term fixed rate. I see this in consumer behaviors often.”

Could LLPA changes make a difference?

In the quest to improve affordability for prospective homebuyers, Federal Housing Finance Agency (FHFA) Director Bill Pulte recently announced that the regulator would enlist the help of mortgage prognosticator Barry Habib — a new addition to Fannie Mae’s board of directors — to review the loan-level price adjustments (LLPAs) that accompany conforming loans.

The announcement drew praise from mortgage industry trade groups and United Wholesale Mortgage CEO Mat Ishbia, who offered comments this week in a video posted to YouTube.

“I’m really excited about this,” Ishbia said. “Whether it happens in one month or in one year, the fact that they’re looking at it and finding ways to maybe say, ‘Hey, there’s some excessive LLPAs that are impacting homeownership, maybe we can make some changes?’ Whether it’s on a certain product, certain LTV, certain FICO bucket, who knows? But the fact that they’re looking at it is a positive sign for all of us. We’ve been wanting change.”

The risk-based LLPAs can add thousands of dollars in costs to a loan, depending on the borrower’s credit profile. UWM has previously moved to temporarily lower these fees on the government loans it originates, although the fees do not apply to the government lending market at large.

“There has been little momentum (if any) on this topic,” Crescenzo added. “The most aggressive price adjustments occurred back during the recovery efforts from the crash in 2008, nearing an almost 20-year anniversary of these significant adjustments.”

How will the housing market end the year?

Lisa Sturtevant, chief economist for Bright MLS, said in commentary last week that the Fed rate cuts of September and October “have not done as much to jumpstart the housing market as some had hoped.”

She pointed to NAR’s pending home sales index for September, which showed that the number of contract signings flatlined on a monthly and yearly basis. It’s an early indicator that the fall housing market may not heat up despite significantly lower mortgage rates than a year ago.

“As we approach the end of the year, listing activity tends to slow and would-be sellers decide to wait until after the new year to list,” Sturtevant said. “Ongoing uncertainty in the economy could also mean rising rates through the end of the year. For prospective buyers who are financially ready, right now could be a sweet spot for lower rates and more inventory.”

Samir Dedhia, CEO of One Real Mortgage, offered a more optimistic view. He pointed to lower yields for long-term bonds like 10-year Treasury notes as a sign that mortgage rates will remain near their current levels.

“For consumers, this is a compelling window,” Dedhia said. “Rates in the low 6% range are creating real opportunities. We’re seeing refinance activity rise significantly (more than half of all mortgage applications for several weeks now) and buyers are showing renewed confidence with rising purchase activity.”

Crescenzo offered advice for prospective buyers who want to utilize a down payment assistance (DPA) program, saying that these options “may solve a short-term problem (assets) but are causing overall payments to be higher.” The number of DPA programs available nationwide rose to a record high in the second quarter of 2025, according to Down Payment Resource.

“I believe there is a lot of information available, but the approval criteria may be harder to meet without the money put down. So, a loan could be approved, but the down payment criteria not approved in some cases. I would recommend reading all details and what could be required if a buyer want to sell the home after a short period of time as an example.”