When Will Mortgage Rates Drop

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A common question on many minds today is: when will mortgage rates start to decline? After years of rising rates and significant fluctuations in 2024, there’s a strong desire for some relief.

While it’s impossible to predict exactly when and by how much rates will change, experts have shared insights into what we might expect in the coming year. Here’s a look at the latest forecasts.

Mortgage Rates Expected to Ease and Stabilize in 2025
Following a period of volatility and uncertainty, recent projections suggest that mortgage rates should begin to stabilize over the next year, with a slight decrease from current levels. Forecasts from Fannie Mae, Wells Fargo, and the Mortgage Bankers Association predict rates could start at 6.58% and end the year at 6.33% in 2025. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes, "While mortgage rates remain elevated, they are expected to stabilize."

Key Factors That Will Impact Mortgage Rates
It’s important to understand that predicting mortgage rate movements is extremely difficult. These projections depend on several key factors aligning, and rates may still fluctuate based on ongoing economic conditions. Here are some of the major factors that will influence future rates:

Inflation: If inflation slows, mortgage rates could decrease further. However, if inflation persists or rises, rates may remain high for a longer period.
Unemployment Rate: The unemployment rate significantly impacts the Federal Reserve’s decisions. Although the Fed doesn’t directly set mortgage rates, their actions reflect broader economic trends, which can affect rates.
Government Policies: With a new administration taking office in January, fiscal and monetary policies could influence the financial markets and the direction of rates.

While these forecasts are based on the best available data, they may change as new economic information becomes available. It's important not to try to time the market based solely on these projections.

Instead, focus on what you can control right now. Work on improving your credit score, saving for a larger down payment, and automating your savings. These actions will help you get closer to achieving your homeownership goals.

Beth Dickerson

Boston, MA

Primary phone
(617) 510-8565
Email
[email protected]
Address
277 Dartmouth St. , 2nd Floor,
Boston, MA 02116

About The Author

One of Boston’s most reputable real estate brokers, Beth Dickerson has achieved more than $2 billion in sales and thousands of successful real estate transactions over her nearly thirty-year tenure. Beth has received national acclaim from the real estate industry and represents some of the most prestigious residents and properties across Massachusetts. Her enduring record as a top producer comes from the intuitive gift of sensing her clients’ needs. She has built a business that is referral-based at its core—a testament to her relationship-driven approach and penchant for exceeding expectations. It is this nuanced expertise that Beth leverages to guide many of her clients-turned-friends through some of the greatest milestones of their lives.

Beth was the proprietor of her own real estate company before joining the residential division of R. M. Bradley in 1993, where she was a top producer for more than a decade. In 2003, she founded her own boutique real estate firm, Dickerson Real Estate, before merging with Gibson Sotheby’s International Realty in 2007. Today, Beth attributes her success to her comprehensive marketing and advertising strategies, exclusive contact network, and unparalleled insight into neighborhoods like Back Bay, Beacon Hill, the South End and Waterfront. With an understanding that no two clients are alike, she works with clients in all phases of life—from first-time buyers to luxury developers, seasoned sellers and beyond. Beth offers clients the resources to aggressively market their property locally, nationally and globally, and her attention to detail, drive and enthusiasm are unmatched.

Beth has appeared in prestigious media outlets including The Wall Street Journal, Mansion Global, The Boston Globe, and Boston magazine, and was prominently featured as Greater Boston’s real estate expert on WCVB Chronicle in 2020. She has had the honor of serving as President of the Downtown Council of the Greater Boston Real Estate Board. For over ten years, she has been a Co-Chair and Committee Member for the Massachusetts General Pediatric Hospital for Children’s Storybook Ball. She serves as a Board Member of the Community Music Center of Boston and a member for the Perkins School for the Blind, Emerald Necklace Park Conservancy, Justine Liff Luncheon, Youth Villages and the Boys & Girls Club of Boston, among dozens of other organizations throughout the Boston area.

A long-time resident of Boston’s Back Bay, Beth was an active member of the community as she raised her two children: she served as treasurer of the Clarendon Street Playground and was an avid supporter of the Hill House Community Center.