Mortgage Rates

Are Mortgage Rates Going Down in 2025?

Mortgage rates have stayed stubbornly high this year, but it’s hard to predict the exact path forward amid heightened economic volatility. Although forecasts are far from guaranteed, analysts currently expect the 30-year fixed rate to stay in the mid-6% range throughout 2025, declining somewhat through 2027.

This overarching sense of economic uncertainty is reflected in the forecasts. While some industry groups expect rates to fall, others now think rates will stay the same. Federal Reserve Chair Jerome Powell says it best: “Forecasts are highly uncertain. Forecasting is very difficult. Forecasters are a humble lot with much to be humble about.”

Rates will stay relatively high as long as the economy keeps outpacing expectations, while an economic downturn could send rates tumbling lower – either way, economists don’t anticipate a dip into the 3% or 4% range in the foreseeable future. Here are the mortgage rate predictions for 2025:

• Fannie Mae: Rates Will Average 6.6%

The July Housing Forecast from Fannie Mae‘s Economic and Strategic Research Group puts the average 30-year fixed rate at 6.8% in the beginning of 2025, declining marginally to 6.4% throughout the year. Fannie Mae economists revised their projections for home price growth downward in 2025, from 4.1% to 2.8%. However, the group expects home sales volume to improve in both 2025 and 2026.

“Our total home sales outlook for 2025 was revised to 4.85 million, up from 4.82 million previously. Our 2026 home sales projection is 5.35 million, up from 5.25 million.” – Fannie Mae ESR Group

• MBA: Rates Will Stay Above 6.7%

The Mortgage Bankers Association predicts in its Mortgage Finance Forecast that 30-year mortgage rates will stay flat, starting the year at 6.8% and ending at 6.7%. The trade group kept is forecast this month essentially unchanged as the main economic trends influencing interest rates continue to develop as expected: economic growth will slow, the job market will soften and inflation will pick up as a result of tariffs.

“As rates remain volatile, we continue to expect that there will be times of limited refinance opportunity, which will lead to somewhat higher refinance volume this year relative to 2024.” – MBA economists Mike Fratantoni and Joel Kan

• NAHB: Rates Will Average 6.7%

The National Association of Home Builders expects that mortgage rates will average 6.7% throughout 2025 and 6.3% in 2026. Conditions are likely to improve in 2026, when the trade group expects rates to fall below the 6% threshold and average 5.98%. NAHB expects economic growth to average less than 1% throughout every quarter in 2025 as part of a larger economic slowdown. The trade group also expects the job market to lose steam and unemployment to rise but ultimately stay below 5%.

“While it will not be smooth, NAHB anticipates the 30-year mortgage rate to average around [6.62%] by the end of 2025, and just above 6% by the end of 2026.” – Eric Lynch, NAHB economist

• NAR: Rates Will Average 6.7%

The National Association of Realtors projects in its latest Quarterly U.S. Economic Forecast that mortgage rates will average 6.7% in 2025, falling to 6% in 2026. While NAR previously expected that rates would decline somewhat in 2025, its forecasters now expect lower rates in 2026 instead, which would help unlock some activity in the housing market.

“High mortgage rates are causing home sales to remain stuck at cyclical lows. If the average mortgage rates were to decline to 6%, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners.” – Lawrence Yun, NAR chief economist

• Realtor.com: Rates Will Average 6.7%

The 2025 Housing Forecast from Realtor.com calls for another year of strained housing affordability and high mortgage interest rates. The real estate listings website predicts in a mid-year update that rates will average 6.7% in 2025, falling to 6.4% by year-end – revised higher from 6.3% to 6.2% from the initial forecast released earlier this year. While it’s taking longer than originally expected, Realtor.com still believes that rates will decline in late 2025 through 2026.

“We expect moderating growth and relatively contained inflation pressures to win out and help mortgage rates edge lower in the back half of 2025.” – Realtor.com Economic Research

• Wells Fargo: Rates Will Average 6.67%

In its latest U.S. Economic Outlook, Wells Fargo made very few revisions to the 2025 forecast for the month as economists continue to follow Fed officials by digesting incoming economic data as it comes. While Fed policymakers kept the federal funds rate steady in the central bank’s July meeting, there will be much more data shedding light on the economy’s health by the next meeting in September.

“Two more labor market reports and three more CPI reports will be released between now and the September 17 FOMC meeting, giving Fed policymakers the opportunity to ascertain how the economy is responding to tariff increases.” – The Economics Group of Wells Fargo Bank