Mortgage Rates Take a Breather at 6.87% - A Homebuyer’s Window of Opportunity!

Mortgage Rates Dip to 6.87%, Signaling Possible Uptick in Housing Demand Despite Inflation Pressures

Mortgage rates edged lower this week, hinting at a potential boost in housing demand even as high inflation continues to cloud economic outlooks. According to [Freddie Mac], the average rate for a 30-year fixed home loan declined to 6.87% for the week ending February 13, down from 6.89% the previous week. Although rates remain elevated compared to early 2024, this marks the lowest level recorded so far in 2025.

Freddie Mac Chief Economist Sam Khater noted that while mortgage rates have hovered near 7% for several months, the recent decline provides an encouraging sign for homebuyers. “Recent mortgage rate stability is benefiting potential buyers, as purchase demand is stronger than this time last year,” Khater explained.

Despite persistent affordability concerns, the gradual easing of rates could encourage more buyer activity in the spring housing market. However, analysts caution that it may be too soon to expect significant rate reductions, given current economic conditions.

New data from the Labor Department signaled that inflation accelerated, complicating the Federal Reserve’s decision-making on interest rates. The consumer price index (CPI) rose 3% annually in January, an uptick from December’s 2.9% rate. Core inflation, which strips out volatile food and energy costs, reached 3.3%. Rising grocery prices, particularly due to the ongoing avian flu epidemic that has driven egg costs up 53% year over year, contributed to inflationary pressures.

Given that the Federal Reserve aims for a 2% inflation rate, this recent data makes an immediate interest rate cut unlikely. The central bank has indicated it will maintain a cautious stance, ensuring inflation comes under control before adjusting lending rates. As long as inflation remains elevated, potential homebuyers could continue facing high mortgage interest rates, keeping affordability strained.

While mortgage rates remain a concern, the real estate market has seen adjusting dynamics. According to, the median home list price nationwide declined 1.2% year over year for the 37th consecutive week, reflecting cooling home prices amid affordability challenges.

With active inventory rising by 27.5% year over year and fresh inventory increasing for the fifth consecutive week, sellers appear to be returning to the market. However, price reductions have also surged, with 38% more listings offering price cuts compared to last year. This suggests that while housing supply is growing, demand has not yet fully rebounded.

“The gap between buyer and seller activity remains, but we expect stronger buyer engagement as the spring housing market approaches,” noted Realtor.com senior analyst Hannah Jones.

As housing market trends continue shifting, homebuyers remain cautious, with listed homes staying on the market longer—four days more on average compared to the same period last year. While some hesitant buyers may return as economic conditions stabilize, affordability remains a critical factor.

Experts warn that expectations for significantly lower mortgage interest rates may not materialize in the near term, barring a notable drop in inflation or major policy shifts from the Federal Reserve. As a result, prospective buyers are advised to focus on larger down payments to offset financing costs.

With home sales projected to improve in 2025 following a slow 2024, market participants—including buyers, sellers, and investors—should remain attentive to housing market trends as evolving economic conditions shape the landscape.