Mortgage Rates Forecast for 2025
Drum roll: mortgage rates could either dip or tick up slightly next year.
Forecast Based on Historical Data
Home loan pricing will likely run between 6.15 percent and 7.55 percent, according to a forecast by the Orange County Register, based on 52 years worth of Freddie Mac mortgage statistics.
The forecast is based on the average difference between the year’s high and low rate — 1.4 percentage points — and applied it to the 6.85 percent rate at year-end 2024.
Historical Context
This year, mortgage rates averaged 6.72 percent, which ranks as the 31st-highest yearly rate in 52 years. A typical mortgage rate over the past half century is 7.7 percent. The worst rate for borrowers was in 1981, at a typical 16.7 percent.
Year-Over-Year Comparison
For 2024, the 6.72 percent average rate was 0.09 percent less than the 6.81 percent last year. It’s the 24th biggest dip since 1972.
However, if the year’s final weekly rate of 6.85 percent is stacked up against the end of 2023, rates rose by 0.24 percentage points. That’s the 16th largest increase, by this measurement.
Rate Variance
This year’s highest rate of 7.22 percent came the week of May 22. Looking back 52 years, that ranks as only the 30th highest on record, according to the Register.
There’s a 12 percent difference in the size of the mortgage check between this year’s highest and lowest rates. That ranks No. 27 over 52 years and under the 14 percent average spread.
Conclusion
In short, the ups and downs of next year’s mortgage rates won’t be dramatic. In fact, the rates will likely fall beneath historic norms, according to the newspaper’s analysis by Jonathan Lansner.
FAQs
Q: What is the forecasted range for mortgage rates in 2025?
A: Mortgage rates are expected to range between 6.15 percent and 7.55 percent.
Q: What is the average difference between the year’s high and low rate?
A: The average difference is 1.4 percentage points.
Q: What is the typical mortgage rate over the past half century?
A: The typical mortgage rate over the past half century is 7.7 percent.
Q: What was the worst rate for borrowers in 1981?
A: The worst rate for borrowers in 1981 was 16.7 percent.
