When government-sponsored enterprise Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS) on Jan. 15, it had found significant news for homeowners and homebuyers.
The 30-year fixed-rate mortgage (FRM) averaged 6.06%, down from the previous week when it averaged 6.16% and down from the preceding year when it averaged 7.04%.
The 15-year FRM averaged 5.38%, down from the prior week when it averaged 5.46%. A year ago at this time, the 15-year FRM averaged 6.27%.
“Late last week, mortgage rates dropped, driving the weekly average down to its lowest level in more than three years,” said Sam Khater, Freddie Mac’s Chief Economist.
Related: Warren Buffett’s Berkshire Hathaway shares mortgage warning
Then Freddie Mac made a prediction about the upcoming spring housing market.
“The impacts are noticeable, as weekly purchase applications and refinance activity have jumped, underscoring the benefits for both buyers and current owners,” he continued.
“It’s clear that housing activity is improving and poised for a solid spring sales season.”
Warren Buffett’s Berkshire Hathaway explains refinancing result
If a homeowner has a mortgage rate of more than 7%, they have the opportunity to refinance that loan for a rate a full percentage point lower or more.
During my 14 years as a homeowner and in reporting on real estate and the housing market for TheStreet, I have rarely seen a refinancing opportunity that offers this much interest savings — especially considering events in recent years.
Mortgage rates have undergone a remarkable swing the past few years. After dipping below 3% in 2020 and 2021, they later shot past 7% in 2023 before easing back toward roughly 6.0% in January 2026, according to the Federal Reserve Bank of St. Louis.
Warren Buffett’s Berkshire Hathaway HomeServices explains that dropping a full percentage on one’s mortgage rate can reduce a monthly payment by nearly 20%.
“You’ll have closing costs — just as you did on your purchase loan — of approximately $8,000,” Berkshire Hathaway wrote. “It will take 2.5 years to break even, so the longer you stay in your home, the more you’ll save. For a half-point difference, it will take five years to break even.”
You could think about refinancing when rates move around, whether your goal is to secure a lower rate, shorten your repayment period, or reduce your monthly bill.
Some homeowners also refinance to move from an adjustable-rate loan to a fixed-rate option, eliminate private mortgage insurance, or tap into home equity to fund improvements that increase a property’s value.
“To ensure you’re making the right decision financially, you must carefully weigh the costs of refinancing against the potential savings,” Berkshire Hathaway wrote.
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Key times when refinancing is worth it
- To secure a reduced interest rate: A lower rate can decrease your monthly payment and lead to substantial long‑term savings, according to The Mortgage Reports.
- To reduce monthly expenses: Extending the loan term or obtaining a more favorable rate can make payments more manageable.
- To convert to a fixed-rate mortgage: Shifting from an adjustable-rate loan provides consistent, predictable payments.
- To eliminate mortgage insurance: Refinancing into a conventional loan can remove the added cost of PMI.
- To access home equity: A cash‑out refinance can provide funds for improvements, debt repayment, or major purchases.
- To shorten the repayment period: Choosing a 15‑year mortgage can significantly reduce total interest paid, even if monthly payments increase, The Mortgage Reports explains.
Berkshire Hathaway HomeServices clarifies homebuyers wants
Homebuyers’ priorities shift over time as the economy evolves, cultural trends change, and new building technologies emerge. Still, one thing remains constant: When people search for a home, they carry two mental checklists — what they’re hoping to find and what they’d rather avoid.
In the current market, many buyers feel squeezed by soaring home prices, persistent interest rates, and broader global uncertainty affecting everything from employment to investments.
With household incomes not rising fast enough to match the growing costs of homeownership, most buyers are hesitant to take on projects, repairs, or upgrades unless they’re seasoned investors or flippers.
“So, in a nutshell, buyers don’t want to spend any more money than they have to,” Berkshire Hathaway HomeSellers wrote. “It’s good to know where buyers are coming from to help you decide what steps you’ll take to market your home.”
What homebuyers don’t want
- Signs of neglect: If you didn’t fix that broken drawer, what else did you ignore? Neglect makes buyers question everything they’re seeing. Today’s buyers don’t have time, desire, or the experience to fix one thing after another, Berkshire Hathaway wrote.
- Outdated features: Outdated décor is a hint to buyers that systems are outdated, too. Old paint colors, wallpaper, textures, appliances, and carpets make buyers feel like they’re caught in a time warp. It’s worse if the appliances, HVAC, electrical panel, and outlets aren’t updated, either.
What homebuyers want
- Eat‑in kitchen island: A central island offers a natural gathering spot for meals, homework, and conversation. Staging it with simple place settings and quality seating helps buyers picture everyday use, Berkshire Hathaway explained.
- Walk‑in pantry: Most buyers want ample pantry space for storing groceries, bulk items, and small appliances. A large, organized pantry signals convenience and better kitchen functionality.
- Energy‑star appliances: Efficient appliances lower utility costs and reduce water and energy use. They appeal to buyers looking for long‑term savings and modern performance.
- Stone countertops: Bold, thick stone slabs with dramatic veining and matte finishes create a high‑end look. Extending stone up the wall or adding waterfall edges enhances the design, while mixing materials adds warmth and practicality.
- Smart features: Smart thermostats, appliances, and AI‑driven systems help reduce operating costs and improve convenience. Features like automated lighting, alerts, and integrated charging surfaces show buyers the home is modern and efficient.
- Laundry facilities: A dedicated laundry room with storage or pet‑friendly features adds major convenience for buyers upgrading from shared or limited facilities.
- Outdoor living space: Porches, patios, and well‑designed yards expand usable living area and support entertaining. Firepits, pools, gardens, and lighting elevate the appeal.
Related: Redfin forecasts major mortgage rate change
