Mortgage rates are unlikely to drop as much as many homebuyers hope this year, experts say. However, a dip in March is predicted due to the slowing economy and uncertainty around Donald Trump’s policies.
Recent economic data suggests a cooling US economy, with bond yields falling to their lowest level in three months. This has led some to believe that rates will continue to fall as the economy slows down. However, Melissa Cohn of William Raveis Mortgage said that the Fed is unlikely to lower its benchmark rate during their next meeting on March 19.
The US is experiencing a housing affordability crunch due to a historical lack of supply, rising homeowners insurance premiums, and high mortgage rates. While some markets are softening, prices are still rising, with the typical home price expected to remain between $6 and $7 million this year.
Mortgage rates have already decreased after hitting the 7-percent mark in January for the first time since May 2024. However, experts expect them to hover around the same level throughout 2025 and 2026. The Fed’s decisions have a strong influence on mortgage rates, but it is unlikely that they will lower their benchmark rate during the next meeting.
Uncertainty surrounding the US economy and Trump’s policies could still lead to a slight decrease in mortgage rates. However, experts agree that this is unlikely to have a significant impact. Instead, homebuyers can expect modestly improving conditions in the housing market, with inventory growing and prices decreasing. This will provide some momentum to the housing market, just in time for the start of the spring buying season.
In summary, while mortgage rates may dip slightly due to economic uncertainty, they are unlikely to drop as much as expected this year. Homebuyers can expect modestly improving conditions in the housing market, with inventory growing and prices decreasing, which will provide some momentum to the market.
Source: https://www.newsweek.com/homebuyers-receive-mortgage-interest-rate-warning-2040446