Mortgage Rates Stuck in Mid-6% Range: What 2025 Holds

NEW YORK — If you’ve been hoping  mortgage rates would drop soon, don’t hold your breath. Despite the Federal Reserve’s rate cuts, experts say 30-year mortgage rates are likely to remain stuck in the mid-6% range through most of 2025.

As of late November, the average 30-year fixed mortgage rate sits at 6.19%, according to recent data. That’s a far cry from the historic lows of 2.65% seen in early 2021, but it’s also down from the 7%+ rates we saw earlier this year.

Why Rates Aren’t Dropping Faster

Here’s the thing: while the Fed has cut its benchmark rate, mortgage rates don’t follow in lockstep. They’re more closely tied to 10-year Treasury yields, which have actually been rising lately.

“Persistent inflation is keeping longer-term rates elevated,” said Michael Harrison, Chief Economist at Mortgage Insights Group. “Even with the Fed cutting, we’re not seeing the relief in mortgage rates that many expected.”

The Fed cut rates by 25 basis points in December, bringing the probability to around 85%. But inflation has been stickier than policymakers hoped, hovering around 3%—well above the Fed’s 2% target.

What Homebuyers Can Expect

So what does this mean if you’re looking to buy? The current 6-7% range isn’t great, but it’s not catastrophic either. Most forecasts suggest rates will stay in this zone through 2025, with a potential dip toward 6% by late 2026.

But wait—there’s some silver lining. Home prices have started to stabilize in many markets, and inventory is slowly improving. That means you might have more negotiating power than you did a year ago.

Bottom line? Don’t expect a return to the 3% days. Those were a pandemic-era anomaly. If you’re financially ready and find the right property, waiting for rates to drop another half point might not be worth missing out on your dream home.