By Mike Bodeen · 27 October 2025
Last Friday, mortgage rates dropped to 6.19% for the 30-year fixed rate. The 15-year dropped to 5.76%. These are rates not seen for over a year. Definitely very good news for buyers. And mortgage applications reacted strongly – just one problem – the applications that took off were for refinances – but purchases not so much.
This is certainly good for lenders. A loan is a loan is a loan, right? But not so good for sellers and Realtors.
The Cromford Report stated that, “While rates are actively dropping, it’s human nature to wait and see where they stabilize before taking action, hoping to save even just a few extra dollars off a payment…It’s common for buyers to get caught up waiting for evidence that it’s the “perfect time” to act, and delaying an affordable purchase in order to land some unicorn price and mortgage rate. Real estate is typically a long-term investment, however. The longer one holds a property, the more equity is built, appreciation accumulated, and risk of loss mitigated.”
“So, the lower rates have increased demand for refi’s, but we’re still awaiting home buyers dependent on mortgages to return to the market.”
The still unanswered question is at what rate and/or price drop will buyer’s jump into the market. Even though rates have been nicely dropping, prices in many areas have actually remained the same, or increased.
The $500,000 to $1,500,000 price range was up in sales 19% year over year, which increased overall market share from 36% to 38%. This also increased both the median and average price per square foot valley wide. In contrast, demand for the $300,000 to $500,000 market, according to Cromford is anemic. This price range is most susceptible to pricing and mortgage rates.
So, the lower rates have increased demand for refi’s, but we’re still awaiting home buyers dependent on mortgages to return to the market.
Two weeks ago we mentioned that listing inventory begins to drop just before Thanksgiving, mostly due to little desire for sellers to put their home on the market before the first of the year plus existing sellers taking their home off the market to take a break over the holidays. We’ll know shortly whether this trend continues. (see chart below)
If we see more rate drops sooner, that might encourage more buyers to start looking sooner, though that appears unlikely, at least until the Holidays are behind us.
Market data referenced in this article comes from The Cromford Report.