Mortgage rates dipped slightly Thursday but remained within their recent narrow range, a day after the federal government released a stronger-than-expected January jobs report.
The average rate on 30-year fixed home loans decreased to 6.09% for the week ending Feb. 12, down from 6.11% the week before, according to Freddie Mac. For perspective, rates averaged 6.87% during the same period in 2025.
"Bolstered by strong economic growth, a solid labor market and mortgage rates at three-year lows, housing affordability continues to measurably improve," said Sam Khater, Freddie Mac's chief economist. "These factors have caught the attention of many prospective homebuyers, driving purchase application activity higher than a year ago."
The U.S. unemployment rate dropped to 4.3% last month, the lowest since August, as the economy added 130,000 new jobs, with the biggest gains seen in health care, social assistance, and construction industries, according to the latest data release from the Labor Department.
Realtor.com® Economist Jiayi Xu says the better-than-anticipated jobs report offers the Federal Reserve more room to hold off on future rate cuts, even though markets continue to price in two reductions later this year.
On prediction marketplace Polymarket, the probability that Fed policymakers will keep rates unchanged at the next meeting of the Federal Open Market Committee in March rose to 93% by Thursday, up from 87% the day before.
"As investors weigh persistent rate pressure against optimism in the labor market, steady wage growth and job security should help support buyer confidence to move forward with a purchase —especially as the spring buying season approaches," says Xu.
Mortgage rates have lingered in the low-6% range for weeks, keeping borrowing costs elevated yet manageable enough for buyers and sellers already prepared to make a move, but likely not low enough to draw additional shoppers off the sidelines.
Outstanding mortgage data show that 78.8% of home loans are below 6%, highlighting that most current borrowers are locked into earlier, lower rates.
While active listings continued to rise year over year in January, inventory growth has slowed for the ninth consecutive month, leaving total supply still about 17.2% below pre-pandemic levels.
"In short, while the market remains stable, a larger drop in rates will be needed to attract new buyers and sellers and truly reignite the housing market," says Xu.
How mortgage rates are calculated
Mortgage rates are determined by a delicate calculus that factors the state of the economy and an individual’s financial health. They are most closely linked to the 10-year Treasury bond yield which reflects broader market trends, like economic growth and inflation expectations. Lenders reference this benchmark before adding their own margin to cover operational costs, risks, and profit.
When the economy flashes warning signs of rising inflation, Treasury yields typically increase, prompting mortgage rates to increase. Conversely, signs of falling inflation or weakness in the labor market usually send Treasury yields lower, causing mortgage rates to fall.
The mortgage rates you’re offered by a lender, however, go beyond these benchmarks and take some of your personal factors into account.
Your lender will closely scrutinize your financial health—including your credit score, loan amount, property type, size of down payment, and loan term—to determine your risk. Those with stronger financial profiles are deemed as lower risk and typically receive lower rates, while borrowers perceived as higher risk get higher rates.
How your credit score affects your mortgage
Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you'll receive. The higher the credit score, the lower the interest rate you'll qualify for.
The credit score you need will vary depending on the type of loan. A score of 620 is a "fair" rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.
Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates.
Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. They want to make sure you're able to pay back the loan.
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