Mortgage Rates Predictions for 2025
Mortgage rates did not go down as hoped despite all the mortgage drama from Federal Reserve policy of lowering the rates.
Mortgage rates averaged 6.72% in 2024. That may sound high to young people or folks with short memories, but it ranks only as the 31st-highest yearly rate out of these 52 years.
The old-timers can tell you tales about the worst year for borrowers – the 16.7% rates of 1981.
What will mortgage rates be in 2025?
Given the volatility of mortgage interest rates over the past two years, it’s impossible to predict where rates will land in 2025. Our best educated guess is that mortgage rates will be lower by the end of 2025 than they’ll be at the start of the year, with the possibility of volatility in between. The picture can change depending on inflation, income growth, unemployment and other economic factors.
Volatile rates offer risk and opportunity. Even small changes in interest rates can have an impact on the size of your mortgage payment, so serious buyers — especially those in expensive markets — should keep an eye on rates to see how it affects not only their future mortgage payment but how much they can comfortably spend on a home.
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