The average 30-year fixed mortgage rate fell to 5.94% in Mortgage News Daily's Friday survey, the first sub-6% reading since November 2024 and a level that economists say will materially unfreeze the U.S. housing market heading into the spring selling season. The 15-year fixed dropped to 5.21%, while the average jumbo rate fell to 6.08%.
The decline reflects a 41-basis-point collapse in the benchmark 10-year Treasury yield over the past five sessions, which closed Friday at 3.78% — its lowest level since the Iran-Hormuz crisis began. Yields have fallen on a combination of safe-haven flow unwinds, falling oil-driven inflation expectations, and rising market-implied probability of a June Federal Reserve rate cut. CME FedWatch now prices a 68% probability of a 25-basis-point cut at the June 17 FOMC meeting, up from 22% a week earlier.
Refinance Wave Builds
The Mortgage Bankers Association's refinance index jumped 47% week over week — its largest gain since the August 2024 rally — and now sits 184% above year-ago levels. Approximately 4.2 million U.S. mortgages carry rates of 6.5% or higher and would benefit economically from refinancing at current levels, MBA economist Mike Fratantoni estimated.
Purchase application volumes, which had been depressed for most of the past two years, climbed 12% on the week — the strongest gain since February 2025. Realtor.com economist Danielle Hale told clients that "if rates can hold below 6% through May, we expect existing-home sales to climb above a 4.5 million annualized pace by July, breaking three years of historic stagnation."
Builder Stocks Rally
Homebuilder equities surged on Friday, with the iShares U.S. Home Construction ETF (ITB) gaining 4.8% on the day and 9.4% on the week. Lennar, D.R. Horton, NVR, and PulteGroup all hit fresh 52-week highs. Building products and home improvement names also rallied — Home Depot rose 3.4% Friday and Lowe's gained 4.1%.
Bond market technicals support the move continuing. Open interest in 10-year Treasury futures has surged to record levels, while CFTC positioning data shows leveraged funds covered a substantial portion of their net-short Treasury position last week. "Dealers are now structurally positioned for lower yields," wrote BMO's Ian Lyngen on Friday.