2025 Mortgage Rates: Up or Down?

If you’re looking to buy a new home this year, you’re probably wondering about mortgage rates. “Will they go down? Or could they go up again? We are getting these questions a lot,” says Danielle Sette of Team Sette Davidson at ERA Justin Realty. 

“While no one can answer that question with complete accuracy,” says Sette’s partner Jennifer Davidson, “Experts are predicting they will either stay the same or continue to go down a bit over the course of the year.”

Mortgage rates bounced around a lot in 2024, leaving many house hunters wondering whether they should wait until a better time to buy. “There is never a better time than the present,” says Jennifer Darby Metzger, Broker/Owner of ERA Justin, “If a home you love and can afford comes on the market, an interest rate should not hold you back. Interest rates can be refinanced. Your perfect home might cost a lot more if and when rates drop.”

While there is no crystal ball to gaze into and predict mortgage rates, there are several key factors to keep an eye on that could affect them. “Inflation is one of them,” says Settte, “If inflation cools a bit, rates could drop more.”

 “On the flip side,” adds Davidson, “If inflation rises mortgage rates could stay higher longer.”

Another thing to keep an eye on is the unemployment rate. “The unemployment rate is one something the Fed factors in when deciding whether to cut interest rates,” says Metzger. “The Fed doesn’t set mortgage rates directly, its decisions on banking interest rates reflect the country’s greater economy and that impacts the cost of mortgage loans.”

Bottom Line: While mortgage rates are expected to ease a little in 2025, they’re going to be a moving target over the next few months. If you’re too busy to keep an eye out for the best time to buy, Team Sette Davidson or any of the knowledgeable real estate agents at ERA Justin can do it for you. Give us a call at (201) 939-7500.