Mortgage rates have been on a wild ride the past few years. In fact, it was still possible to get a 3% fixed mortgage for 30 years in early 2022.
By late 2023, you may have faced a mortgage interest rate of 8%. Today your price might start at 5, 6 or 7.
Volatility has prevailed as the Federal Reserve battles inflation, and economic uncertainty makes it difficult to ascertain the long-term direction of interest rates.
But one thing I’ve noticed is that rates tend to perform better during certain times of the year.
It is in the winter months, which in the Northern Hemisphere include December, January and February.
Winter is a historically great season for mortgage rates
Without getting too technical here, winter runs from December 1st until the end of February.
It’s three months more or less, although if you want the technical information, there it is Astrological season And the meteorological season.
Anyway, I’ll keep it simple and focus on the months of December, January and February. These are your prime winter months, and also when the weather is coldest.
Although I don’t like being cold (since I live in Southern California), winter isn’t all bad. In fact, there is actually an advantage to winter when it comes to mortgage rates.
And maybe shopping for a house too.
I crunched numbers going back to 1972 and found that mortgage rates tend to be lowest in the winter months.
Using Freddie Mac’s initial mortgage market survey (PMMS), I compiled the monthly averages to determine if there were any standout months.
Lo and behold, February It was the best month for mortgage rates in 50 years.
Mortgage rates were at their lowest levels in February on average in 50 years
As you can see from my chart, which took a lot of time to create, the 30-year fixed rate averaged 7.62% in February back in 1972, according to Freddie Mac.
While this is about a full percentage point higher than Freddie’s current weekly rate of 6.69%, it is the best month ever.
The only better month was January, where the average rate was 7.64%, followed by December at 7.68%.
So what does that tell us? Well, this Winter is the best season for mortgage rates! Throughout the winter months, mortgage rates tend to be at their best, aka their lowest.
To take advantage of this trend, you may want to refinance your mortgage during these months or even purchase a home during these months.
Although I’m not a huge fan of market timing, there are some clear benefits that go beyond interest rates themselves.
In general, there is less competition if buying a home because it is a quieter time of year, and there are fewer other clients if you are refinancing a mortgage.
This means you can get a lower price for the home, or, if refinancing, better customer service and faster turnaround times.
Mortgage lenders also tend to offer more savings during slow periods. When they are less busy, they need to drum up business, so this may explain why prices are lower.
Spring and summer are the worst seasons for mortgage rates
Now we know that winter is usually the best season when it comes to mortgage rates. But what about the worst?
Once the weather starts to warm up, mortgage rates tend to rise as well.
While March seems like a good month spanning the end of winter to the beginning of spring, it only gets worse from there.
The worst months are May and June, and April is practically with them. This also happens when home shopping is in full swing.
So you get the unwelcome combination of greater competition from other homebuyers and higher mortgage rates (on average).
This type of purchase is incompatible with buying a home in the spring/early summer as sellers may be encouraged to stand firm on price. Lenders may not be willing to offer discounts or negotiate much.
Combined, you’re looking at a potentially inflated home sales price and a higher mortgage rate.
The only real upside is that there may be more on-sale inventory to choose from, which can be a plus since it’s been a slim selection for years now.
Mortgage rates are unpredictable and may vary regardless of the season
Final note here. Just because mortgage rates tend to be lower in the winter doesn’t mean they always are.
The same applies to higher rates in the spring and summer. There have been years and there will be years when the opposite is true.
For example, the 30-year fixed yield started 2024 at around 6.60% and was as low as 6% in mid-September.
But in 2023, the yield on 30-year bonds bottomed at around 6% in February and peaked at around 8% in October.
So sometimes it will “work” and sometimes it won’t. Pay attention to larger trends if you’re looking to track mortgage rates.
Right now, it looks like we are moving lower with inflation falling and the economy shaking.
This means that mortgage rates may continue to fall this month and next, perhaps reaching these low levels again in February 2025.
Just know that there will always be surprises (presidential inauguration?) and good weeks and bad weeks along the way.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My work experience in the early 2000s inspired me to start writing about mortgages 18 years ago to help potential (and current) homebuyers better navigate the home loan process. Follow me on Twitter for hot takes.
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