Where are Rates Going? Rate cuts in 2025?

Home interest rates are expected to gradually decline throughout 2024, following a period of elevated rates in 2023. As of late June 2024, the average 30-year fixed-rate mortgage is around 6.86%, with slight variations among different financial institutions and predictions for the rest of the year. Forecasts for the third quarter of 2024 predict average rates ranging from 6.7% to 7.1%. Several factors contribute to these rate movements, including inflation trends, Federal Reserve policies, and broader economic conditions. With inflation gradually cooling and the economy showing signs of slowing, many experts believe mortgage rates will continue to trend downwards.

However, mortgage rates can be influenced by a variety of unpredictable factors, such as global economic events and changes in Federal Reserve policies. For example, the Fed’s decisions on interest rates and its activities in the bond market play a significant role in shaping mortgage rate trends . Overall, while rates are currently lower than the peaks seen in 2023, they remain historically moderate.