U.S. mortgage rates have hit a significant milestone this week, dropping to their lowest level in more than three years. The benchmark 30-year fixed-rate mortgage now averages 6.01%, down from 6.09% last week. This is a sharp decline from the 6.85% seen exactly one year ago and represents the most favorable borrowing environment for homebuyers since September 2022. The 15-year fixed-rate mortgage, a popular choice for those looking to refinance, also followed this downward trend. It currently averages 5.35%, sliding from 5.44% last week. For comparison, the 15-year rate stood at 6.04% this time last year. Despite these lower figures, the housing market continues to show signs of hesitation. Monthly home sales recently posted their largest drop in nearly four years, and the pace of sales is at its slowest in over two years. Economic data suggests that while rates are dipping, high overall costs for goods and services are keeping many prospective buyers on the sidelines. Refinancing activity, however, is providing a bright spot for the industry. Applications for refinance loans have more than doubled compared to February 2025, surging by 132%. Homeowners who secured loans during the high-rate peaks of 2023 and 2024 are moving quickly to lock in these newer, lower costs. Market analysts note that the 10-year Treasury yield, which heavily influences mortgage pricing, recently dipped to 4.08%. This movement is a response to cooling inflation and shifts in investor expectations regarding Federal Reserve policy. While the Fed has signaled caution, the general consensus suggests rates will stay in a narrow range between 6% and 6.5% for the remainder of the year. The spring homebuying season is approaching with a gradual increase in inventory. Total housing starts have reached a five-month high, and new listings are up 4.8% year-over-year. This building supply, combined with the current 6.01% rate, may provide the necessary psychological push for buyers to enter the market as the weather improves. Current market indicators show a shift toward a more buyer-friendly environment. Median listing prices have declined 2.9% year-over-year, and homes are staying on the market for an average of 71 days, roughly six days longer than last year. This trend is giving buyers more leverage in negotiations than they have had in several seasons.