Mortgage rates are currently expected to remain relatively high but may gradually decline over the next 12 to 24 months. Experts predict that the average 30-year fixed mortgage rate will hover in the mid-6% range through much of 2025, with some forecasts suggesting rates could dip below 6% by the end of 2025 if inflation remains subdued and economic conditions soften
. Key points on the direction of mortgage rates:
- After falling to a low of about 6.08% in September 2024, rates rebounded and have stayed elevated, around 6.7% to 6.8% in early 2025
- The Federal Reserve’s policies, inflation trends, and economic growth are major influences; if inflation slows and the labor market weakens, the Fed might cut rates, helping mortgage rates to fall
- Without a recession or significant economic weakness, rates are unlikely to drop below 6.5% soon
- Mortgage rates are still below the long-term historical average of about 7.8%, so current rates, while high compared to recent years, are moderate by historical standards
- Market uncertainty, including trade negotiations and fiscal policy, continues to create volatility that can push rates up or down in the short term
In summary, mortgage rates are expected to stay elevated around 6-7% in the near term but could gradually decline toward or slightly below 6% later in 2025 if inflation eases and the economy slows, though a return to rates below 5% is unlikely
