If you’ve been biting your nails, checking the news every morning, or refreshing mortgage-rate pages like a stock trader, you’re not alone. The big question on everyone’s mind right now is: will mortgage interest rates go down? At the Jorgenson Group, we’ve been digging into the data, talking to lenders, and watching the bond markets so YOU don’t have to (unless you enjoy that sort of thing). Here’s our warm, slightly cheeky take—and what you can realistically expect in 2025.
Why mortgage rates don’t drop on a whim
First, a reality check: mortgage interest rates don’t operate on a “you wish, I drop” schedule. They’re influenced by a mix of bond yields (especially the 10-year U.S. Treasury), inflation expectations, economic growth data, and what the Federal Reserve is doing (or signaling). Even though we often hear that the Fed “sets” mortgage rates, the truth is a bit more subtle: Fed decisions influence short-term rates, which filter into longer rates—but mortgage rates hang out somewhere in that ecosystem. (See PBS for a deeper breakdown) (what to know about the Fed’s rate cut and mortgage rates)PBS
Add to that the reality that rate changes tend to lag market sentiment. If inflation surprises on the upside, or the economy shows unexpected strength, rates can turn upward again pretty fast. So even if things look like they’re settling down, it’s not a guarantee.
What the experts are forecasting (and what’s plausible)
So, will rates go down? The short answer: yes, but gently. Most forecasts expect moderate declines—not dramatic plunges. For example, Fannie Mae now projects that 30-year fixed mortgage rates will end 2025 around 6.4 %, and by the end of 2026, fall to approximately 5.9 %. (mortgage rates expected to move below 6 percent by end of 2026)Fannie Mae+1
Other predictions are less rosy: some economists believe rates will stay “high for longer,” hovering in the mid-6 % range, especially if inflation sticks around. (mortgage rate predictions: what will rates do over the next 5 years)Yahoo Finance The National Association of Realtors is more optimistic, expecting 2025 rates to average right around 6.0 %, which would feel like a relief compared to earlier spikes. (Realtors group forecasts US 30-year fixed-rate mortgage averaging 6% in 2025)Reuters
So yes, a drop is possible. But don’t expect a sub-5 % rate revival any time soon. We’re likely looking at incremental easing over a period of months, not massive overnight shifts.
What could push rates lower—or higher
Let’s get into scenarios that might move the needle:
Inflation cooling – If consumer and wholesale prices calm down consistently, lenders and bond markets could feel safer lowering yields.
Economic slowdown or recession fears – When growth falters, investors often flock to bonds, pushing yields (and consequently mortgage rates) lower.
Fed rate cuts – If the Fed signals or implements cuts, that could help nudge rates downward (though not perfectly in sync).
Credit market volatility or global shocks – These can push rates either direction depending on risk appetite.
On the flip side, if inflation unexpectedly jumps, or wage growth accelerates strongly, markets might force rates higher even if the central bank is trying to hold steady.
What you can do now (hint: don’t just wait)
Here’s where you stay in control, even when rates aren’t:
Get pre-approved early – Knowing your rate bracket gives you confidence (and negotiating power).
Ask your lender about rate locks – If you find a rate you’re comfortable with, lock it to prevent surprises.
Inquire about float-down options – Some lenders let you re-lock at a lower rate if the market improves (for a fee).
Monitor inflation and Treasury yields – These are early indicators of where mortgage rates may head next.
Be ready to act – If rates dip into your ideal window, you don’t want to miss out waiting.
The Jorgenson Group’s take (and a friendly nudge)
At the end of the day, we do believe rates will drift slightly lower in 2025, especially if inflation cools and the Fed leans dovish. That said, we don’t expect fireworks—just some solid breathing room for buyers and refinancers.
If you’re thinking about buying, refinancing, or simply staying informed, reach out. We love nerding out over bond curves, inflation reports, or throwing around predictions (just for fun). Let’s navigate the rate rollercoaster together—and turn uncertainty into action.
