Mortgage Rates Forecast for 2025 - San Antonio, TX - eXp Realty, San Antonio

by Alan Greulich

Mortgage Rates Forecast For 2025: Experts Predict How Much Rates Will Drop

Mortgage rates fell to a 2024 low of 6.08% in September but quickly reversed course, rising to 6.72% by mid-December, according to Freddie Mac.

Experts had expected rates to dip below 6% by year-end, but economic uncertainty, inflation concerns, and policy expectations have kept them elevated.

Fed Cuts Policy Rate for a Third Time: What This Means for Mortgage Rates and Home Affordability

The FOMC cut the federal funds rate by 25 basis points in December, marking a total 100-basis-point reduction for 2024.

This lowers the benchmark rate to 4.25%–4.50% after holding it at a 23-year high for 14 months. Since rate hikes began in 2022 to fight inflation, mortgage rates have surged, pushing home prices to record highs and making buying a home more challenging.

Will Mortgage Rates Drop?

Despite the recent rate cut, experts warn that mortgage rates aren’t likely to decline significantly anytime soon. In fact, rates continued to rise after September’s 50-basis-point cut, with the 30-year fixed mortgage still hovering in the upper 6% range.

“The market had already priced in these expectations, so I don’t expect a big reaction from mortgage rates,” said Danielle Hale, chief economist at Realtor.com.

Kara Ng, senior economist at Zillow Home Loans, adds that mortgage rate trends remain uncertain as the Fed takes a more cautious approach to inflation control. “The Fed will rely heavily on economic data to determine future rate cuts, which could lead to mortgage rate volatility,” she explained.

📌 For more details: Forbes Mortgage Rate Forecast

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