Mortgage Rates Forecast into 2025 – Will they Go Down?

Many experts expect rates to fall below 6% in 2025, but the forecast is far from guaranteed. In January 2023, some analysts thought that rates would be around 4.5% by the end of 2024, which is obviously not happening.

Fed Chair Jerome Powell says it best: “Forecasting’s are highly uncertain….Forecasting is very difficult.”

Rates will likely continue moderating in 2025 and 2026 but will stay relatively high as long as the economy keeps outpacing expectations, but over-all economists don’t anticipate a dip into the 3% or 4% range in the foreseeable future.

Here are the mortgage rate predictions as reported by US News:

• Fannie Mae: Rates Will Average 5.7% in 2025

The October Housing Forecast from Fannie Mae puts the average 30-year fixed rate at 6% by year-end, a decline from 6.5% in the third quarter. All told, the mortgage giant predicts mortgage rates will average 6.6% in 2024 and 5.7% in 2025.

• MBA: Rates Will Fall to 5.9% in 2025

The Mortgage Bankers Association predicts in its October Mortgage Finance Forecast that mortgage rates will fall from 6.5% in the third quarter of 2024 to 6.3% by the fourth quarter. The industry group expects rates will fall to 5.9% in the third quarter of 2025 and will continue declining to 5.9% in late 2025 and early 2026.

• NAHB: Rates Will Average 5.94% in 2025

The National Association of Home Builders expects the 30-year mortgage rate to average 5.94% in 2025, falling to 5.69% in 2026, according to its October Housing and Interest Rate Forecast. The trade group is forecasting that “sustained, sub-6% mortgage interest rates” will begin in the second quarter of 2025, something it previously forecasted to happen in the fourth quarter.

• Wells Fargo: Rates Will Average 5.86% in 2025

In its latest U.S. Economic Outlook, the Economics Group of Wells Fargo Bank puts the 30-year conventional mortgage rate at 6.3% in the fourth quarter of 2024 – a slight increase from when rates dipped in the third quarter. Wells Fargo economists predict that the average rate will dip below 6% in the second quarter of 2025, which is pushed further out from their previous forecast that expected sub-6% rates in the first quarter.

Gena Glaze