The 30-year mortgage rate was averaging about 7% as of the end of November. Where will mortgage rates go in 2025? The Trump administration’s policies could be one factor. - Getty Images
The 30-year mortgage rate is back at 7%. When will rates fall — and by how much?
MarketWatch spoke to several economists about their 2025 forecasts. The consensus was that they expect the rate on the 30-year fixed mortgage to drop to a 6.2% level by the end of 2025, but to not go below that.
The 30-year rate was around 7% as of the end of November, pressured upward by financial markets’ uncertainty about the future. Once markets feel more certain about the future under a second Trump administration, expect the 30-year rate to fall to the 6% range, Vishal Garg, the founder of Better.com, an online mortgage lender, previously told MarketWatch.
Falling mortgage rates are expected to kickstart home-buying demand. But buyers will still have to contend with home prices that soared to record highs this year.
Here’s what experts are forecasting about where mortgage rates will go in 2025:
Realtor.com: Average mortgage rates of 6.3% in 2025
Real-estate platform Realtor.com expects the 30-year mortgage rate to average 6.3% in 2025, and fall to 6.2% by the end of 2025, according to a forecast released Wednesday.
Rates are expected to fall as the Trump administration settles in early next year. The financial markets are presently feeling uncertain over which of President-elect Donald Trump’s policy proposals will come to fruition, “and whether the specifics match or merely rhyme with campaign promises,” the company said.
Concerns over how Trump’s policies will impact the U.S. economy could affect the direction of mortgage rates. If the markets expect the administration’s policies to push up inflation, they expect the Federal Reserve to hold interest rates higher to address consumer prices, which in turn affects how the 10-year Treasury note fares. The 30-year mortgage rate typically rises and falls in tandem with the yield on the 10-year Treasury note.
Trump campaigned on promises to lower mortgage rates to 3% or 2%. The president cannot control or set interest rates.
“The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail, like lowering housing costs for all Americans. He will deliver,” said Karoline Leavitt, spokeswoman for the Trump-Vance transition.
Realtor.com is operated by News Corp subsidiary Move Inc. MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.
Bright MLS: Average mortgage rates of 6.4% in 2025
Real-estate company Bright MLS expects the 30-year mortgage rate to average 6.4% in 2025, and fall to 6.25% by the end of 2025, according to a forecast released Wednesday.
As long as the U.S. economy is strong, rates are expected to stay over 6%. A strong economy “could lead to rising inflation and prompt the Federal Reserve to pause its rate cuts,” the company said.
Trump’s proposed policies, such as tariffs and a crackdown on immigration, could also ignite inflation and worsen the federal deficit, Bright MLS added, both of which could push mortgage rates higher.
Fannie Mae: Average mortgage rates of 6.4% in 2025
Fannie Mae FNMA expects the 30-year mortgage rate to average 6.4% in 2025, and finish the fourth quarter of 2025 at 6.3%, according to its November monthly forecast.
Fannie Mae is a government-sponsored enterprise that backs one in four residential mortgages in the U.S.
The outlook is markedly different from what Fannie Mae was predicting a few months ago. Its economists had previously expected mortgage rates to fall below 6% in early 2025, but have since revised that expectation. The 30-year rate is projected to remain over 6% through 2026, they said.
“Interest rates remain volatile, which adds risk to our outlook,” the company said.
Financial markets are moving up and down rapidly, as they try to assess how the incoming administration will affect the U.S. economy. That affected the economists’ forecasts. “Following the completion of our beginning-of-the-month interest-rate forecast and as of this writing, 10-year Treasury rates have increased around 16 basis points,” they said, “leading to some upside risk to our current baseline mortgage-rate forecast.”
Mortgage rates beyond 2025
Beyond 2025, expect rates to stay at the 6% level, Lawrence Yun, chief economist at the National Association of Realtors, an industry group, said during a recent conference in Boston.
“Are we going to go back to 4%? Per my forecast, unfortunately, we will not,” Yun said. “It’s more likely that we’ll go back to 6%. That will be the new normal, bouncing around 5.5% to 6.5%.”
To be sure, Trump’s proposed tariffs are expected to fuel inflation in the U.S. economy, which could prompt the Fed to keep interest rates higher for longer, other experts previously told MarketWatch.
Trump’s proposed policy to privatize Fannie Mae and Freddie Mac FMCC — another government-sponsored enterprise that, along with Fannie Mae, backs the bulk of residential mortgages in the U.S. — could also hurt home buyers, analysts at Bank of America Global Research wrote in a Nov. 8 note.
Privatizing Fannie and Freddie “would lead to higher mortgage rates,” they said, but added that they were “skeptical that there would be enough support for the plan.”
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