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Homebuyers sitting on the sidelines may want to reconsider their plans.

declined again this week, following a fall to an just last week. Now at an average of 6.35% for 30-year terms, rates are at their lowest level in nearly a year. Last September, for example, they briefly hovered around the 6% mark before rising in the months after. By January 2025, they were over 7%, according to historic data.

Now, however, following a slow but steady , rates could be low enough to justify action. Before getting started and to better time an application, it can help to understand the dynamics behind this shift as well as the ways to take advantage while it's available. Below, we'll break down three important questions worth asking (and answering) to better inform next steps.

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To better decide if now is the right time to act, buyers and owners considering a refinance should start by considering these three questions:

Mortgage interest rates are largely declining thanks to two primary factors: An assumption that the Federal Reserve will reduce rates when the central bank meets again next week and a cooling . Combined, those two factors have driven rates toward the 6% mark and, potentially, can push them later this month.

This is always a hard question to answer and will largely depend on your interpretation of the rate climate. If you're confident that rates will continue to cool and can afford to wait, then delaying action, even by a few weeks, could pay off in the form of lower mortgage rates. 

That said, there's no guarantee here. And it's worth remembering that after , they soon rose right back to where they were. Delaying action in pursuit of an ideal, lower rate could, in turn, be risky. It may be worth shopping around now to see what's available instead.

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It may be. A lot depends on what interest rate your current mortgage is set to. If today's mortgage refinance rates of 6% for a 15-year term and 6.72% for a 30-year mortgage are at least one percentage point lower than your current rate, it's advisable to pursue. That said, there are some instances where even may justify a refi. 

Still, you'll want to be strategic here. Mortgage refinancing does come with , and you'll want to make sure that the expense is outweighed by the savings, even if it does take 12 to 18 months to break even.

A consistent drop in mortgage rates understandably entices both buyers and owners looking for a refinancing opportunity. By understanding the dynamics behind the decline and by closely considering the pros and cons of taking action now, both groups can better determine next steps. While evaluating your opportunities, however, it's also smart to take an introspective look at your finances so that you're truly prepared to make a move. And with rates here quickly evolving, that may be sooner than anticipated.