Why mortgage rates remain so high—and what to expect in 2025

Mortgage costs stayed stubbornly high in 2024, with 30-year fixed rates holding well above 6% for most of the year. Unfortunately for buyers, 2025 isn’t looking much better.

Bạn đang xem: Why mortgage rates remain so high—and what to expect in 2025

The Federal Reserve has been cutting interest rates, making the cost of borrowing for loans, credit cards, and auto financing cheaper. But mortgage rates haven’t really budged, frustrating potential buyers who had been holding out for lower home financing costs.

Instead, mortgage rates track more closely with 10-year Treasury bond yields, which lenders use as a benchmark for setting long-term borrowing costs.

Xem thêm : Dogecoin’s Remarkable Surge: Large Transaction Volume Spikes 41% as Network Activity Intensifies

These yields remain high due to lingering concerns about inflation — fueled by a strong economy and expectations of more deficit spending under president-elect Donald Trump. Investors are demanding higher returns on bonds to offset these risks, and as a result, bond yields — and mortgage rates — are staying elevated.

Trump has also proposed higher tariffs on imported goods, “which is always inflationary,” says Doug Carey, a chartered financial analyst and founder of WealthTrace, a financial planning software company. As a result, mortgage rates could remain higher than expected in 2025, he says.

With so much economic uncertainty, the outlook for mortgage rates in 2025 remains challenging for buyers.

While the Federal Reserve is expected to further reduce its benchmark interest rate by another 50 basis points, bringing it to a range of 3.75% to 4%, these cuts might not be enough to significantly lower borrowing costs for homebuyers.

Xem thêm : See How Today’s Rates Compare

That said, most forecasts have 30-year rates below the current rate of 7.11% as of Monday morning, according to Mortgage News Daily.

Here’s a look at the latest projections for 30-year fixed mortgage rates in 2025 from leading financial institutions and industry organizations:

Want to make extra money outside of your day job? Sign up for CNBC’s online course How to Earn Passive Income Online to learn about common passive income streams, tips to get started and real-life success stories.

Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.