“Will Mortgage Rates Drop in 2025?” Here’s What Experts Are Saying

If you're planning to buy a home in 2025, you're likely keeping a close eye on mortgage rates—and for good reason. Mortgage rates play a huge role in your monthly payment, loan approval, and overall affordability. After two years of rising interest rates, many buyers and sellers are asking the same question:
Will mortgage rates finally drop in 2025?

Let’s take a look at what real estate and economic experts are predicting, and what it could mean for you.

A Quick Recap: Mortgage Rates in 2023–2024

Over the last two years, the Federal Reserve raised interest rates multiple times to combat inflation. As a result, 30-year fixed mortgage rates surged to levels not seen in over two decades—reaching over 7% in some areas by late 2023.

In 2024, rates fluctuated but remained elevated. Homebuyers were squeezed, and some sellers held off listing their homes, waiting for better conditions.

What Experts Are Predicting for 2025

Here’s what industry analysts and financial institutions are currently forecasting for mortgage rates in 2025:

• The Federal Reserve May Ease Rates

Many experts believe the Fed will begin to cut interest rates gradually in late 2024 and into 2025, as inflation shows signs of cooling and the economy stabilizes.

🔍 Expert Insight:
“If inflation continues to slow and economic growth moderates, we expect the Fed to start easing rates, which could lower mortgage rates to the mid-6% range or even below.”
— Lawrence Yun, Chief Economist at the National Association of Realtors (NAR)

• Projections from Major Institutions

• Fannie Mae projects 30-year fixed mortgage rates may fall to 6.0% or slightly lower by Q4 2025.

• The Mortgage Bankers Association (MBA) anticipates rates could reach the 5.5%–6.0% range, assuming economic softening and Fed policy shifts.

• Goldman Sachs is slightly more cautious, predicting 6.3%–6.5% by year-end 2025.

• Housing Demand Will Still Be Strong

Even with modest rate drops, housing demand—especially from millennials and Gen Z buyers—remains strong. Limited housing inventory and steady demand could keep home prices stable or rising, despite softer rates.

What This Means for Buyers & Sellers

For Buyers:

• Lower mortgage rates can significantly reduce your monthly payment.

• Waiting could help you afford more house for the same budget.

• However, lower rates may bring more competition into the market—so timing is key.

For Sellers:

• Dropping rates could bring more buyers off the sidelines, potentially driving up demand.

• If you've been holding off listing your home due to low buyer activity, 2025 could be your window to sell.

Pro Tip: Don’t Try to “Time” the Market

While mortgage rate trends are important, the best time to buy or sell is when you're personally and financially ready. Focus on:

• Your monthly payment affordability

• Your long-term goals

• Your local market conditions

And remember—you can always refinance later if rates drop significantly after you purchase.

What Should You Do Now?

• Buyers: Get pre-approved now so you’re ready to act quickly if rates dip.

• Sellers: Start preparing your home and strategy with a local agent.

• Everyone: Stay informed and work with professionals who understand both national trends and your local market.

Final Thoughts

So, will mortgage rates drop in 2025? Most experts say yes—but gradually. While we may not see the ultra-low rates of the pandemic era again anytime soon, more affordable rates are likely on the horizon.

Whether you’re buying your first home or planning to sell, now is a great time to start planning for what’s ahead.

Need help navigating today’s market?
Let’s talk. I’m here to help you make confident, informed real estate decisions—no matter what mortgage rates are doing.

Disclaimer: The information provided in this post is intended for general informational purposes only and should not be taken as professional tax or legal advice. While every effort has been made to ensure the accuracy and reliability of the content, readers are encouraged to do their research and consult with a qualified professional to address their specific needs and circumstances.