Will Mortgage Rates Go Down in 2025? What You Need to Know

Will mortgage rates go down in 2025? If you’re like me, that’s one of the biggest financial questions on your mind right now. Whether you’re planning to buy your first home, refinance your current mortgage, or simply want to keep an eye on the housing market, understanding where rates are headed can make a huge difference in your financial planning.

In this article, I’ll guide you through expert forecasts, current economic indicators, recent rate trends, and what all of this means for your next move. Let’s unpack everything you need to know, including how recent Fed news and market data play a role.


Looking Back, Mortgage Rates in 2024

Before diving into 2025, it helps to understand how we got here.

A Recap of Mortgage Rate Changes in 2024

In 2024, rates fluctuated based on several key economic factors:

  • Inflation remained stubbornly high until late Q3.
  • The Federal Reserve hiked its benchmark rate multiple times.
  • Global economic uncertainty and job market shifts also had an impact.

Major Dates and Figures

Date30-Year Fixed15-Year FixedFed Funds Rate
September 17, 20247.23%6.56%5.50%
December 16, 20246.97%6.38%5.25%

Will Mortgage Rates Go Down in 2025? Expert Insights

Andrew Dehan’s Take on 2025

Mortgage industry analyst Andrew Dehan suggests we might see a modest decline in rates during 2025. Based on inflation data and Federal Reserve behavior, he expects:

  • A slow, steady decline in rates if inflation eases.
  • 30-year fixed rates could average around 6.5% by Q4 2025.
  • Refinancing might become more attractive in mid-to-late 2025.

Recent Rate Changes in 2025

  • March 31, 2025: Rates held steady around 6.89%.
  • April 28, 2025: Rates dipped slightly to 6.78%.
  • May 26, 2025: Another minor decrease to 6.72%.
  • May 28, 2025 (Refinance-specific): Refinancing rates hovered around 6.5%, offering opportunities for eligible borrowers.

What Drives Mortgage Rates?

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Federal Reserve Announcements

Fed rate decisions don’t directly change mortgage rates, but they heavily influence them. Here’s how:

  • Higher Fed rates = More expensive borrowing for banks = Higher mortgage rates for you.
  • Lower Fed rates = Easier credit = Potential for lower mortgage rates.

Economic Indicators

  • Inflation: The higher the inflation, the higher the mortgage rate.
  • Unemployment: High job losses can cause the Fed to cut rates.
  • GDP Growth: A strong economy can mean higher rates to cool spending.

Should You Buy or Refinance in 2025?

Pros of Buying or Refinancing Now

  • Current rates may still be lower than future highs.
  • Housing inventory is improving in many markets.
  • Locking in a rate gives you peace of mind.

Risks of Waiting

  • Home prices may continue rising.
  • You could miss out on building equity.
  • Predicting the bottom of a rate cycle is difficult.

5 Signs It’s Time to Refinance

  1. Your current rate is above 7%.
  2. Your credit score has improved recently.
  3. You’ve built substantial equity.
  4. You plan to stay in the home for at least 5 more years.
  5. You want to shift from ARM to fixed-rate.

Forecasts from Leading Institutions

InstitutionQ3 2025 ProjectionQ4 2025 Projection2026 Outlook
Fannie Mae6.75%6.50%6.30%
Freddie Mac6.80%6.60%6.25%
Mortgage Bankers Assoc.6.65%6.40%6.10%

The trend seems clear: A slow decline is expected, but rates will likely stay above 6% for the foreseeable future.


FAQ: Will Mortgage Rates Go Down in 2025?

What are the latest mortgage rate predictions?

Most forecasts suggest rates will gradually fall, potentially hitting 6.3–6.5% by late 2025.

Is it better to refinance now or wait?

If your current rate is significantly higher than today’s, refinancing now might make sense—especially if you plan to stay put.

Will the Fed cut rates this year?

They might. If inflation continues to drop and job numbers hold strong, the Fed could initiate one or two rate cuts before the end of 2025.

What happened to rates on March 31 and April 28, 2025?

They declined slightly, reinforcing the trend of easing costs for borrowers.


Final Thoughts: Will Mortgage Rates Go Down in 2025?

So, will mortgage rates go down in 2025? Probably—but don’t expect a dramatic plunge. Instead, prepare for a gradual easing over the year. If you’re in the market to buy or refinance, timing your move wisely could save you thousands.

Don’t leave your financial future up to chance. Keep watching the Fed, monitor inflation, and speak with a mortgage advisor who understands your goals.


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