The average 30-year fixed mortgage rate has dipped to around 6.5 percent, the lowest level we’ve seen in months. For many, that number may feel like just another headline until we take the time to break down what it really means.
For African American homeowners and aspiring buyers, understanding how to interpret mortgage rates and knowing when to act can make the difference between being stretched thin and building lasting wealth.
A rate of 6.5 percent may sound high compared to the historic lows we saw during the pandemic, but it is a meaningful improvement from the 7 percent–7.5 percent rates many homeowners locked into just last year. On a $250,000 mortgage, a drop from 7.25 percent to 6.5 percent saves nearly $120 a month. That’s money that can be redirected into paying down other debts, building savings, or investing. For families managing tight budgets, that kind of breathing room can be transformative.
So when should you consider refinancing? The rule of thumb is simple; if you can lower your rate by at least 0.5 percent to 1 percent and plan to stay in your home for more than a few years, it’s worth looking into. But refinancing isn’t just about chasing a lower payment, it can also be about using your home’s equity to achieve other financial goals.
Many Black homeowners today sit on significant untapped equity because of the rapid home price appreciation of the past five years. A refinance can allow you to access some of that equity to consolidate higher-interest debt, fund home improvements, or even invest in additional property. Done strategically, it turns a home into a wealth-building tool, not just a place to live.
Comparing rates is also crucial. Lenders may advertise similar averages, but small differences in fees, points, and loan structures can add up to thousands of dollars over time. It’s not enough to accept the first offer; shopping around and securing at least three quotes is one of the most powerful ways to save. Studies show that borrowers who compare rates can save tens of thousands over the life of a loan, yet too many skip this step, especially in the Black community where access and trust in the lending system have historically been eroded.
Making sense of today’s mortgage rates and what it means for Black homeownership The average 30-year fixed mortgage rate has dipped to around 6.5 percent, the lowest level we’ve seen in months. For many, that number may feel like just another headline until we take the time to break down what it really means. For African American homeowners and aspiring buyers, understanding how to interpret mortgage rates and knowing when to act can make the difference between being stretched thin and building lasting wealth. A rate of 6.5 percent may sound high compared to the historic lows we saw during the pandemic, but it is a meaningful improvement from the 7 percent–7.5 percent rates many homeowners locked into just last year. On a $250,000 mortgage, a drop from 7.25 percent to 6.5 percent saves nearly $120 a month. That’s money that can be redirected into paying down other debts, building savings, or investing. For families managing tight budgets, that kind of breathing room can be transformative. So when should you consider refinancing? The rule of thumb is simple; if you can lower your rate by at least 0.5 percent to 1 percent and plan to stay in your home for more than a few years, it’s worth looking into. But refinancing isn’t just about chasing a lower payment, it can also be about using your home’s equity to achieve other financial goals.
Many Black homeowners today sit on significant untapped equity because of the rapid home price appreciation of the past five years. A refinance can allow you to access some of that equity to consolidate higher-interest debt, fund home improvements, or even invest in additional property. Done strategically, it turns a home into a wealth-building tool, not just a place to live. Comparing rates is also crucial. Lenders may advertise similar averages, but small differences in fees, points, and loan structures can add up to thousands of dollars over time. It’s not enough to accept the first offer; shopping around and securing at least three quotes is one of the most powerful ways to save. Studies show that borrowers who compare rates can save tens of thousands over the life of a loan, yet too many skip this step, especially in the Black community where access and trust in the lending system have historically been eroded. Another consideration is whether to prioritize refinancing or paying down debt faster. If your interest rate is relatively high compared to the new market average, refinancing makes sense. But if you already have a competitive rate, say in the low 6s you might be better off applying extra funds to principal payments instead. Every additional payment you make toward the principal reduces the amount of interest you’ll owe in the long run and accelerates your path to full ownership. Imagine the difference between paying off your mortgage in 30 years versus 22 years, that’s eight extra years of freedom and thousands in interest savings.
For the African American community, where the homeownership gap remains over 20 percentage points compared to White households, moments like this matter. Rates at 6.5 percent may not seem like a dream scenario, but compared to the uncertainty of last year, they present a window of opportunity to act strategically.
Refinancing to save money, leveraging equity to reinvest, or using disciplined payments to shorten your loan term, all of these are moves that strengthen financial stability and build generational wealth.
Property is Power! but only when we understand how to make the system work for us. The current rate environment is not perfect, but it is workable. Now is the time to evaluate your mortgage, compare your options, and make decisions that put your family on a stronger financial foundation. Because every dollar saved, every payment accelerated, and every refinance completed with intention is not just a financial move, it’s a step toward closing the wealth gap and using the power of ownership.
(Dr. Anthony O. Kellum—CEO of Kellum Mortgage, LLC Homeownership Advocate, Speaker, Author NMLS # 1267030 NMLS #1567030 O: 313-263-6388 W: www.KelluMortgage.com.)
Property is Power! is a movement to promote home and community ownership. Studies indicate homeownership leads to higher graduation rates, family wealth, and community involvement.
About Post Author
