In addition to the mortgage, the annual costs of owning a home include:
Bankrate found that the typical family home comes with an additional price tag. That’s $18,000 in “hidden expenses” each year. (Scripps News)
scripps news
It took three and a half years, but the mortgage interest rate finally reached 5 handles.
Mortgage borrowing costs exceeded 6% in September 2022 and have remained at least at that level, sometimes in the 7% range, since then. But as of Feb. 26, the weekly average interest rate on Freddie Mac’s popular 30-year fixed-rate mortgage was 5.98%. This is a national average, and while some areas may still have interest rates above 6%, others may have had interest rates in the 5% range for some time.
But overall, the country’s milestone is welcome news for a limp housing market. In 2024, existing home sales fell to their lowest level since 1995. When the numbers are finally tallied in 2025, it is likely to fall further.
“These rates make sense when coupled with improved home sales availability, which should bring more potential buyers to the market for the spring home buying season,” Sam Cater, Freddie’s chief economist, said in a release.
Buyers get more for their money
Bhavesh Patel, head of consumer channels at Chase Home Lending, said lower interest rates mean buyers “can afford more homes.” For every 0.25 percentage point cut in interest rates, prospective buyers will be able to purchase approximately 2.5 percentage points more home, he explained.
“This could be a good time for buyers who have been waiting on the sidelines to enter the market,” Patel said. “If a borrower is financially ready to take on the costs of homeownership, we recommend meeting with a mortgage professional to discuss your options or locking in the current low interest rate while you purchase your home.”
How realistic is a “rate lock”?
While the impact of lower mortgage rates on buyers is clear, there has been a lot of press coverage in recent years about “rate locks,” or how current homeowners don’t like the prospect of forgoing ultra-low interest rates to become sellers.
As of the third quarter of 2025, the most recent data available, nearly half of homeowners with mortgages had interest rates between 3% and 5%, according to a Realtor.com analysis. Another fifth remained below 3%. For many of those owners, having to sell their home and take out a new loan with an interest rate of just over 6% just didn’t make the transaction worth it.
Benjamin Clark, owner of Homebuyer Representation in Salt Lake City, said rate locks are “not as important as the news makes them seem.” Clark currently has two customers with purchase contracts, both of whom are selling homes they purchased decades ago. “People are moving because now is a good time to move and they have enough capital so they don’t care about interest rates as much,” he told USA TODAY.
Importantly, Clark believes the overall housing market may have calmed down a bit from the dizzying highs and lows of the past few years. He said those looking for a home now have seen interest rates stabilize in the low 6% range for some time, and aren’t blaming themselves for mistiming the market.
“There are a lot more people saying, ‘Maybe I can make this happen’ than there were two or three years ago,” he says.
