Borrowers are finally starting to see signs of hope. Mortgage rates are at their lowest point in 18 months—and expected to fall further—after the Federal Reserve cut short-term interest rates by 0.50% or 50 basis points for the first time since the onset of the pandemic.

In the first week of January, mortgage rates averaged around 6.62%, already elevated compared to historical norms. By late March, they had surged to 6.94%, and by the first week of May, they had reached their peak for the year at 7.22% — up by about 0.6% from the start of 2024.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their loans to a lower rate, also eased.