Mortgage Rates Dip Below 6%: What It Means for Homebuyers

For the first time in quite a while, mortgage rates are offering buyers a bit of welcome relief. As of early January 2026, the 30-year fixed mortgage rate dropped to 5.99%, falling below the 6% mark for the first time since early 2023.

According to Mortgage News Daily, the rate dropped 22 basis points, matching the low last seen on February 2, 2023. This shift may feel small on paper, but for buyers and homeowners alike, it can have a meaningful impact on monthly payments, purchasing power, and overall affordability.

Why This Matters

Mortgage rates play a major role in determining how much home buyers can comfortably afford. Even modest changes in rates can translate into hundreds of dollars per month — or tens of thousands of dollars over the life of a loan.

When rates move below key psychological thresholds (like 6%), it often:

  • Encourages buyers who were previously on the fence to re-enter the market

  • Improves purchasing power, allowing buyers to qualify for slightly higher price points

  • Creates renewed activity among homeowners considering refinancing

What a Sub-6% Rate Can Mean for You

To put this into perspective:

  • On a $900,000 loan, a 0.25% rate drop can reduce monthly payments by several hundred dollars

  • Over a 30-year loan, that difference can add up to tens of thousands in interest savings

For buyers in coastal and high-demand markets, this shift can make a noticeable difference in monthly cash flow and long-term affordability.

Should Buyers Jump In Now?

While rates dipping below 6% is encouraging, it’s important to remember that mortgage rates fluctuate daily and are influenced by broader economic conditions, inflation data, and Federal Reserve policy.

Rather than trying to time the market perfectly, buyers should focus on:

  • Their personal financial readiness

  • Monthly payment comfort

  • Long-term lifestyle goals

In many cases, buyers who find the right home can still benefit from today’s rates — and potentially refinance later if rates continue to improve.

What This Means for the South Bay Market

In markets like Hermosa Beach, Manhattan Beach, and surrounding South Bay communities, rate relief may:

  • Bring more buyers back into open houses

  • Increase competition on well-priced homes

  • Create momentum heading into the spring market

Sellers may also benefit from improved buyer confidence and stronger showing activity.

Bottom Line

Mortgage rates dropping below 6% is a meaningful milestone and a positive signal for the housing market. Whether you’re a first-time buyer, a move-up buyer, or simply exploring your options, understanding how rate changes affect your buying power is key.

If you’re curious how today’s rates could impact your buying or selling plans, I’m always happy to walk through the numbers and talk strategy.

Information referenced from CNBC, January 9, 2026.

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