the average rate on the popular 30year fixed mortgage dropped to 657 monday according to mortgage news daily thats down from a rate of 676 on friday and a recent high of 705 last wednesday mortgage rates follow loosely the yield on the 10year treasury  which fell to a onemonth low in response to the failures of silicon valley bank and signature bank and the ensuing ripple through the nations banking sector in real terms for a buyer looking at a 500000 home with a 20 down payment on a 30year fixed mortgage the monthly payment this week is 128 less than it was just last week it is still however higher than it was in january so what does this mean for the spring housing market in october rates surged over 7 and that started the real slowdown in home sales but rates then started falling in december and were near 6 by the end of january that caused a surprising 8 monthly jump in pending home sales which is the national association of realtors measure of signed contracts on existing homes sales of newly built homes which the census bureau measures by signed contracts also surged far higher than expected while the numbers for february are not in yet anecdotally agents and builders have said sales took a big step back in february as rates shot higher so if rates continue to drop now buyers could return once again but thats a big if this mini banking crisis has to drive a change in consumer behavior in order to have a lasting positive impact on rates its still all about inflation said matthew graham chief operating officer at mortgage news daily markets now have to contend with the inflationary impact of consumer fear he added noting that tuesday brings a fresh consumer price index report a monthly measure of inflation in the economy as recently as last week federal reserve chairman jerome powell told members of congress that the latest economic data have come in stronger than expected if the totality of the data were to indicate that faster tightening is warranted we would be prepared to increase the pace of rate hikes powell said while mortgage rates dont follow the federal funds rate exactly they are heavily influenced by both its monetary policy and its thinking on the future of inflation