Mortgage rates ease, but many house hunters still need hacks

USA Today

05-06-2025

Mortgage rates ease, but many house hunters still need hacks
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Rates for home loans eased, but as housing remains hard to afford, homebuyers have to be as resourceful as possible.
In the week ending June 5, 30-year fixed-rate mortgages averaged 6.85%, Freddie Mac announced, down from 6.89% last week, marking the first decline in five weeks.
Those figures don't include fees or points, and rates in some parts of the country may be higher or lower than the national average.
Mortgage rates have made little meaningful moves at all so far this year: The 30-year-fixed started January at 6.91% and has drifted up and down, a few basis points at a time, since then.
Borrowing costs are only part of the equation for would-be buyers, however. 'The affordability picture for prospective homebuyers has not improved because home prices are still rising,' said Bright MLS chief economist Lisa Sturtevant in a statement out June 4.
More: Down payments are the biggest homeownership hurdle. Why is Washington making them scarcer?
Read next: Can't afford a home? Why becoming a landlord might be the best way to 'house hack.'
At the prevailing interest rate, the median-priced home in April would have a monthly payment of $2,980, Sturtevant said. That compares to $2,965 a year ago, when mortgage rates were higher but home prices lower.
'Some analysts are saying that to get the sluggish housing market moving, all we need is for mortgage rates to fall," Sturtevant said. "But if home prices continue to rise, a drop in interest rates is not going to make much difference to a typical homebuyer. And a drop in rates certainly won't make much of a dent in affordability.'
How homebuyers use hacks to afford homes
Star Addams recently bought a home in Grays Harbor County, near the coastline of Washington State.
Addams, 52, is a single mother, and had spent several years struggling with homelessness before turning things around. She was able to get down payment assistance through her lender, which helped put her over the edge to be able to buy.
The mortgage rate was less important to Addams than the money she had to bring to the table, she said. Her advice to other would-be homeowners: 'Save, save, save because you need closing costs, but you don't need as much as you think you do,' Addams told USA TODAY. 'People often think, oh, I'll never be able to buy a house because I won't have the 20% down but there are a lot of programs that help people.'
They closed the last week of November in 2024, and it took a few days to get electricity turned on, so Thanksgiving dinner was barbecued in the backyard. 'I keep wanting to pinch myself like this, this is my home. It's really mine. It's amazing,' she said.