Possibility of Mortgage Rates Dropping Under 6% by 2025?
In the current housing market, mortgage rates continue to be a topic of interest for homebuyers and investors alike. According to a seasoned market observer, the rates are not expected to drop below 6% in 2025, as suggested by various expert predictions.
As of August 2025, the average 30-year fixed mortgage rate hovers around 6.72%. This figure, while higher than recent years, isn't out of line with historical averages.
Fannie Mae's economic team predicts a 6.5% rate for the end of 2025, with a decrease to 6.1% anticipated for 2026. Similarly, other experts, such as the Mortgage Bankers Association, expect rates to stay around 6.7% for 2025, with significant declines below 6% unlikely until late 2026, unless there is a notable economic slowdown or increased unemployment triggering Fed rate cuts and lower bond yields.
Realtor.com also projects a 6.4% rate by the end of 2025, while Morgan Stanley foresees rates potentially reaching 6.25% by 2026. The National Association of Realtors (NAR) anticipates an average mortgage rate of 6.4% by the end of 2025 and a further dip to 6.1% in 2026.
The speaker emphasises the importance of doing homework, seeking professional advice, and making smart financial decisions when navigating the current market. They also advise focusing on cash-flowing investment properties in strong rental markets and being prepared for rates to stay elevated.
New listings have been added by Norada, a service that helps investors identify turnkey real estate deals that deliver predictable returns, even when borrowing costs are high. This could be an opportunity for investors looking to capitalise on the current market conditions.
Despite the high mortgage rates, the speaker believes the current market offers opportunities for both buyers and sellers. The speaker does not mention any impact of the Fed's decisions on mortgage rates, nor do they discuss the influence of inflation or economic growth on these rates.
In conclusion, while mortgage rates may gradually ease from their peak highs earlier in 2025, expert consensus strongly indicates they will remain above 6% throughout the remainder of 2025. Investors are encouraged to do thorough research, seek professional advice, and focus on cash-flowing properties in strong rental markets to navigate this market effectively.
[1] Fannie Mae. (2025). July 2025 Economic and Housing Outlook. [online] Available at: https://www.fanniemae.com/resources/file/research/home/2025/07/01/eho-202507.pdf
[2] Mortgage Bankers Association. (2025). Forbearance and Call Volume Survey. [online] Available at: https://www.mba.org/news-research-and-resources/research-and-economic-insights/mortgage-finance-forecasts-and-reports/mba-forbearance-and-call-volume-survey
[3] Realtor.com. (2025). August 2025 Housing Market Trends Report. [online] Available at: https://www.realtor.com/news/trends/august-2025-housing-market-trends-report/
[4] National Association of Realtors. (2025). 2025 Housing Forecast. [online] Available at: https://www.nar.realtor/newsroom/2025-housing-forecast
- The mortgage rates, currently around 6.72%, are predicted to stay above 6% for the remainder of 2025, with some expert predictions suggesting a possible decrease to 6.1% by 2026.
- Investors are encouraged to focus on cash-flowing properties in strong rental markets to navigate the current real estate market effectively.
- Norada, a service that helps investors identify turnkey real estate deals, has added new listings, potentially offering opportunities for investors looking to capitalize on the current market conditions.
- Analyzing market trends, doing homework, and seeking professional advice are essential when making smart financial decisions in the current real estate investment landscape.
- The current housing market offers opportunities for both buyers and sellers, according to the speaker, despite the generally high mortgage rates.
- Various experts, such as Fannie Mae and the Mortgage Bankers Association, have published reports discussing their mortgage rate predictions for 2025 and beyond.
- The speaker does not mention the potential impact of the Fed's decisions on mortgage rates, nor do they discuss the influence of inflation or economic growth on these rates.
