Mortgage Rates Dropped Below 6% for the First Time Since September 2022

Average 30-year fixed mortgage rate just dropped below 6% for the first time since September 2022. After more than 2 years above that level, breaking below 6% materially changes affordability, refinance math, and buyer behavior. This isn't about calling a market bottom. It's about recognizing that financing costs just improved in a way that meaningfully affects purchasing power and long-term interest expense.

If you're in Austin, Denver, or Los Angeles — 3 markets where pricing, inventory, and loan structure interact differently — this shift is more than symbolic. It creates real financial leverage.

Here's what that means for buyers and homeowners.

Mortgage Rates Today: What Changed

Mortgage rates are driven by long-term bond markets, not directly by the Federal Reserve. Over the past several months, inflation data has cooled meaningfully, economic growth has moderated, and bond investors have adjusted expectations around future policy.

The result is improved mortgage pricing.

What’s important is how this move happened. Rates didn’t collapse because of panic or economic stress. They eased gradually as markets grew more confident that inflation is contained. Those types of moves tend to be more durable than emergency-driven rate drops.

When the average 30-year fixed falls below 6% after hovering above it for years, it changes borrower behavior. Buyers who were waiting re-run payment scenarios. Homeowners who locked in during 2023 or 2024 start asking whether this is their refinance window.

And it’s happening right as we move into busy season.

Should I Refinance Now? The Question Everyone Is Asking

Trying to time the absolute bottom in mortgage rates is rarely a winning strategy. The better question is whether today’s rate materially improves your position.

If you financed in the mid-sixes or sevens, a move into the high fives or low sixes can translate into meaningful monthly savings. On larger loan balances in markets like Los Angeles or parts of Austin, even a modest rate improvement can represent hundreds of dollars per month.

Refinancing is not just about payment reduction. It can also be about shortening your loan term, eliminating mortgage insurance, repositioning equity, or reducing long-term interest cost.

What borrowers often overlook is that refinance windows tighten quickly. Once rates move through key levels, volume increases. Lenders get busier. Turn times stretch. Pricing can worsen slightly as pipelines fill.

Borrowers who move early in rate cycles typically experience cleaner execution, more predictable timelines, and stronger pricing before lender pipelines expand.

VA IRRRL Rates Are Already Attractive

Before discussing conventional refinance opportunities further, it’s important to address veterans specifically.

Today's VA IRRRL rates are currently hovering around 5.375% with no points.

That pricing is meaningful in the current rate environment.

The VA Interest Rate Reduction Refinance Loan is designed to provide a tangible benefit to existing VA borrowers. In most cases, there is no appraisal requirement. Income documentation is limited. The process is streamlined by design.

For veterans who purchased or refinanced during higher-rate periods over the last few years, this is often the first clear opportunity to meaningfully reduce payments without complexity.

In Austin and Denver, where many veterans bought homes between 2022 and 2024, this can represent immediate monthly savings while maintaining the long-term advantages of VA financing — no monthly mortgage insurance, flexible underwriting, and competitive pricing.

In Los Angeles, where loan balances are higher, the dollar impact is even more pronounced. A reduction into the mid-fives on a substantial loan balance creates real financial breathing room.

VA borrowers do not need a dramatic market collapse to benefit. The structure of the IRRRL program rewards timely action.

Buying Power Improves Faster Than Headlines Suggest

Sub-6% mortgage rates do more than improve refinance math. They increase purchasing power.

Buyers often focus on home prices, but interest rates influence affordability just as much. A half-percent move can offset meaningful price differences. In competitive markets, it can determine whether a borrower comfortably qualifies or stretches uncomfortably.

The timing matters because we are entering peak transaction months.

In Austin, inventory has improved compared to the frenzy years. Sellers are negotiating again. Concessions are available. Builders are offering incentives. When rates dip heading into spring, buyers gain a rare combination of leverage and improving affordability.

In Denver, stability defines the market. Price corrections were moderate, and demand never disappeared. Rate improvement restores confidence more than it dramatically changes pricing. Buyers who paused are now re-engaging with clarity.

Los Angeles responds even more dramatically to rate movement. With higher price points and larger loan sizes, small rate improvements translate into substantial payment changes. A drop below 6% can unlock entire segments of the market that felt marginally out of reach.

Austin: Strategic Buying in a Reset Market

Austin has transitioned from hyper-competitive to balanced. That balance creates opportunity.

Higher inventory means buyers can negotiate repairs, seller-paid closing costs, and rate buy-downs. When mortgage rates improve simultaneously, the math becomes compelling.

For homeowners who bought during higher-rate periods, refinancing now can improve monthly cash flow without giving up long-term appreciation potential. Austin remains a growth market. Resetting your rate while values stabilize positions you well for the next cycle.

For buyers, acting before competition fully returns preserves negotiating power. As soon as rates stabilize comfortably below 6%, activity increases. The window between improved affordability and heightened competition is typically narrow.

Denver: Stability Meets Discipline

Denver’s market is measured. Employment remains solid. Migration trends are steady. Price movements have been less volatile than other major metros.

In environments like this, small rate improvements meaningfully influence buyer confidence. People who were comfortable but cautious become active.

For homeowners considering whether to refinance now, Denver offers clarity. If the rate improvement materially reduces payment or long-term interest cost, execution makes sense. The market is not driven by urgency, which allows borrowers to move strategically rather than reactively.

Los Angeles: When Fractions Equal Thousands

Los Angeles magnifies rate impact.

Higher loan balances mean that even modest improvements translate into substantial monthly and lifetime savings. Sub-6% averages signal broader pricing relief across conventional, high-balance, and jumbo segments.

For buyers, this can mean qualifying more comfortably at target price points. For homeowners, refinancing can produce immediate and meaningful payment reductions.

Because of the size of transactions in Los Angeles, early action in rate cycles often produces outsized benefits. Delaying by a few months in a rising-demand environment can reduce flexibility and increase competition for lender capacity.

The Psychological Shift

Mortgage markets move in cycles of hesitation and acceleration.

When rates remain elevated, buyers delay. When rates begin easing, they watch. When rates cross key psychological thresholds, behavior changes.

Six percent has been that threshold for nearly two and a half years.

Crossing below it does not guarantee a rapid downward trend. It does signal momentum. Momentum affects decision-making.

Borrowers who understand this dynamic position themselves ahead of crowd behavior. They evaluate whether refinancing now improves their financial structure. They assess buying opportunities before competition fully intensifies.

They do not attempt to predict perfection. They act when the math works.

The Real Advantage: Optionality

Mortgage decisions should not be framed as permanent. Refinancing today does not eliminate the possibility of refinancing again later. Buying in today’s rate environment does not prevent you from improving your terms in the future.

The real advantage in moments like this is optionality.

Lowering your rate reduces interest expense. Improving your payment strengthens cash flow. Entering the market before competition surges preserves negotiating power.

For VA borrowers, the IRRRL program is already offering compelling execution in the mid-fives without points. For conventional borrowers, sub-6% averages signal that the broader rate environment is improving. For buyers in Austin, Denver, and Los Angeles, the timing aligns with peak activity season.

The question is not whether rates might fall further. It is whether today’s environment improves your position meaningfully.

If it does, the opportunity is here.

Mortgage markets tend to reprice in phases. When financing improves ahead of peak transaction season, borrowers who evaluate their options early often secure better outcomes than those who wait for consensus headlines.

Why Execution Matters

Headlines say the average 30-year fixed is below 6%. That does not tell you what your loan prices at. Credit, loan size, property type, reserves, and market all affect execution.

At LendFriend Mortgage, we structure Conventional, Jumbo, VA, VA IRRRL, and Non-QM loans daily in Austin, Denver, and Los Angeles. In markets like this, small pricing differences can mean real money.

If you are a veteran, a 5.375% VA IRRRL with no points may already represent a clear tangible benefit. If you financed in the mid-6% or 7% range, refinancing now could materially improve your payment and long-term interest cost. If you are buying heading into busy season, positioning matters.

The Bottom Line

The drop below 6% changes the math.

If refinancing improves your numbers, execute. If buying now improves your purchasing power before competition accelerates, move decisively.

And if you want a direct answer to whether this window benefits you, LendFriend will run the analysis and structure it correctly.

Schedule a call with me today or get in touch with me by completing this quick form to learn more.