Mortgage rates have been pretty volatile lately. The average 30-year fixed-rate mortgage shot up to nearly 8% in late 2023 — a more-than-two-decade high.

Rates fell to just above 6% last fall as the Federal Reserve started cutting short-term interest rates, but then bounced back above 7% in mid-January, all before starting to decline again in recent weeks. 

Given how much uncertainty there is about inflation, tariffs and Fed policy right now, Mike Fratantoni at the Mortgage Bankers Association said that the watchword for mortgage rates is fluctuation.

“There may be times when we’re closer to 6%, there are going to be times when we’re closer to or above 7%,” he said.

Fratantoni said the market is gradually adapting to higher mortgage rates. More sellers are putting their homes on the market, and more buyers are realizing “a rate in the low sixes is about as good as you’re likely to do.”

And what about the recent decline in mortgage rates to 6.76% in the latest report from Freddie Mac? 

It does improve affordability marginally, per Rose Quint at the National Association of Home Builders. “But I think with high home prices, buyers are concerned,” she said.

NAHB recently reported that the monthly mortgage on a median-priced home now eats up 38% of the income of a family earning the national median. Economists consider anything above 30% to be “cost-burdened.”