Hey, buckle in! We’ve got some intel on mortgage rates you’ll want to hear. Are we finally about to see those high numbers take a nosedive in 2025?
Will 2025 Be the Year Mortgage Rates Finally Drop—and Stay Down?
You know, that’s the million-dollar (or should I say, ‘mortgage’?) question. Some big wigs in the industry seem to think our days of mortgage rate stress could be numbered – 2025 might just be our lucky year. But don’t get too excited, we’re not talking about a plummet here, more like a graceful decline.
All the cool kids like the National Association of Realtors, Zillow, Realtor.com, and Redfin are on the bandwagon predicting a decrease in mortgage rates for next year. But don’t ask for specifics, the jury’s still out on that one.
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Slow, Unsteady Progress for Mortgage Rates
Now, what does a ‘graceful decline’ look like? Well, picture this year, but less of a rollercoaster ride. You see, we had quite the yo-yo situation in 2024, reaching a peak of 7.22% in May, taking a breather at 6.08% in September, and then deciding it hadn’t had enough.
This snail-pace improvement of mortgage rates is surely a bit annoying for you homebuyers out there and the rising costs over these past couple of years haven’t exactly been a party. Half the attendees in an Opendoor survey said high mortgage rates are spoiling the fun of home buying moving into the new year.
What Factors Will Shape Mortgage Rates in 2025?
Scott Bridges, a top dog at Pennymac, jokes that predicting mortgage rates is trickier than catching a fish with your bare hands. Guess we can’t blame him. With the new president pulling the strings, it’s like trying to predict weather with a spinning bottle.
But true to form, buyers are watching the Federal Reserve like hawks, hoping they’ll swoop in with rate cuts on short-term interest. Sadly, the boss, aka the central bank, doesn’t have much say in long-term home loan rates.
Leo Pareja, CEO of eXp Realty, puts it perfectly: think of mortgage and Treasury yields as synchronized swimmers, not the Fed’s puppet show.
When you’re scrolling through news about conflicts abroad, like in Ukraine or the Middle East, it might not cross your mind that this could eventually shake up your mortgage plan. But according to Pareja, these situations could make Treasury yields skittish and mortgage rates could follow suit. So, despite a generally rosy forecast for 2025, let’s remember to expect the unexpected.
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MORE FROM MONEY:
- 8 Best Mortgage Lenders of 2024
- Will 2025 Finally Be a Buyer’s Market in Housing?
- Interest Rate Forecast: How Much More Will the Fed Cut?
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So, folks, that’s the skinny on 2025’s mortgage rates. Cross your fingers, knock on wood, or whatever you do to keep the bad juju away. Let’s hope for the best!