When Will Mortgage Rates Go Down? A look at 2025.
Since late 2022, mortgage rates have jumped to between 6% and 7%. Rates started to drop in the summer of 2024 in anticipation of the Federal Reserve cutting the federal funds rate by 25 basis points at its Sept. 18 meeting.
The Fed did indeed announce a rate decrease at the September meeting, then again at its November and December meetings. Mortgage rates lowered in anticipation of the year’s final cut for a few weeks before the December meeting. However, the Fed currently only foresees slashing its rate twice in 2025. So, are mortgage rates going to keep going down?
Are mortgage rates already decreasing?
Yes and no. Let’s start with the good news.
Yes, mortgage rates have decreased significantly since autumn 2023. According to Freddie Mac, in mid-December 2023, the 30-year fixed mortgage rate was 6.95%, and the 15-year fixed rate was 6.38%. Both rates have dropped by well over 30 basis points since then.
Now for the bad news: Since September, mortgage rates have not been decreasing as aggressively as many people hoped. After the Federal Reserve lowered its rate in September and November, rates mostly stayed flat or increased. However, mortgage rates have been inching down over the last few weeks in anticipation the Fed’s 25-basis-point rate cut at its December meeting.
