Mortgage rate forecasts for 2025 are already proving to be incorrect, as rates jumped back over 7% after Fed Chair Jerome Powell’s language changed in the December meeting. Most analysts expect mortgage rates to remain in the 6 handle throughout the year, but a recent spike shows that even optimistic predictions may not hold true.
In 2024, mortgage rates averaged 6.72%, higher than expected, and most forecasters underestimated the trend. However, this time around, experts seem more convinced that rates will stay elevated during 2025, with few predicting a drop into the 5s. The consensus view is that there are limited catalysts for rates to decrease.
A table compiled by HousingWire shows a wide range of forecasts for mortgage rates in 2025, from 5.75% to 7.25%. Some experts believe rates will stay high due to inflation concerns, while others expect a dip in rates under 6% if macroeconomic news is favorable.
The low end of the forecast range assumes easing inflation and softer jobs numbers, while a decrease in mortgage spreads could also push rates lower. However, the high end of the range, which includes forecasts from Redfin, assumes that mortgage rates could spend some time above 7% in 2025.
Making accurate forecasts is challenging due to infinite exogenous factors driving bond markets. HousingWire is taking an cautious approach and assuming that unexpected events will impact mortgage rates, resulting in a wide trading range for the year.
Source: https://www.housingwire.com/articles/2025-mortgage-rates-forecasts-already-wrong