Weekly Mortgage Rates Ebb, but Rates Unlikely to Plunge in 2025

Mortgage interest rates pulled back a little this week, but it was hardly enough to erase the past three weeks’ gains. The week ending Jan. 9, the average rate on the 30-year fixed-rate mortgage fell four basis points to 6.93%, according to rates provided to NerdWallet by Zillow. A basis point is one-one hundredth of a percentage point.

That still leaves mortgage rates at the highest levels we’ve seen in six months. Rates on 30-year, fixed rate loans ended 2024 nearly a full percentage point higher than their low for the year, when rates dropped close to 6% just before the Federal Reserve’s September meeting. In other words, since the Fed started cutting short term rates, mortgage rates have pretty much only gone up.

Where will mortgage interest rates go next? With a new year beginning, plenty of experts have been poring over data to predict mortgage rates — let’s see what they say.

Economists from real estate company Redfin economists offer a fairly conservative outlook. They expect rates to stay in the high sixes, averaging 6.8% throughout the year. That prediction is based on anticipated tax cuts and tariffs under the new administration. They note that should those initiatives be scaled back, or if the economy slows considerably, mortgage rates could fall.

Experts at home search site Realtor.com are significantly more optimistic about mortgage rates, expecting rates to average 6.3% and end the year at 6.2%. In a press release, Realtor.com chief economist Danielle Hale explained that, “The size and direction of a Trump bump will depend on what campaign proposals ultimately become policy and when. For now, we expect a gradual improvement in housing market dynamics powered by broader economic factors.”

At government-sponsored enterprise Freddie Mac, economists don’t get into specifics, but predict rates to fall “very gradually” over 2025. Over at fellow GSE Fannie Mae, the forecast delves into much more detail. Fannie Mae economists anticipate 30-year rates dropping gradually each quarter, ending with a Q4 average of 6.2%. But they also note that these averages encompass what could be significant ups and downs. “Heightened mortgage rate volatility may present opportunities for would-be home buyers to take advantage of temporary lows,” Mark Palim, Fannie Mae senior vice president and chief economist, noted in a press release.