Interest Rates – It’s What Everyone’s Talking About
When will they go down? Are they going to drop by the end of the year? Should you stick with your current interest rate? These are all valuable and great questions. All of us in the mortgage community wish we had all the answers, but it is so unpredictable. Although we are here to guide you with as many answers as possible.
Mortgage Rate Predictions for 2025
Mortgage rate predictions for 2025 generally point to a gradual decline but remaining above 6% for the year:
- Fannie Mae: Predicts the 30-year fixed-rate mortgage will average 6.8% throughout 2025 and conclude the year at 6.6%.
- Mortgage Bankers Association: Expects 30-year fixed rates to decrease to 6.5% by the end of 2025.
- National Association of Realtors: Forecasts 30-year mortgage rates near 6.5% in 2025 and dropping near 6% in early 2026.
Current Trends
That being said, the average 30-year fixed-rate mortgage, tracked by Freddie Mac, currently sits at 6.46%, already down from last October’s cycle high of 7.79%—so we are seeing a decline.
What Does This Mean for You?
These numbers are intimidating—we all know it. As much as we would love to see a return to 2.5% rates, it’s uncertain if that will happen again. The 6% range may be the new “normal.” To break that down a little farther a 6% interest rate means that for every $100 borrowed, you pay $6 in interest annually, or 0.5% per month. There are always options to assist you with paying that 6%. Such as aiming for at least 20% down to avoid private mortgage insurance, which adds to your monthly payment. Consider an Adjustable-Rate Mortgage (ARM). ARMs often lower initial interest rates than fixed-rate mortgages, but the rate can fluctuate over time. You can also Buy Down the rate which means you pay points (upfront fees) in order to lower your interest rate but consider the long-term cost benefit. Give me a call to discuss these options further and get the day-to-day updated rates.
