🏡 Mortgage Rates Could Drop in 2025 & 2026 — But Don’t Expect Much Movement This Year
- Neil Caron
- Apr 2
- 2 min read
Fannie Mae forecasts lower mortgage rates ahead — yet expects only one Fed rate cut in 2025.
In hopeful news for homebuyers and homeowners considering a refinance, Fannie Mae now predicts that the 30-year fixed mortgage rate will gradually decline to 6.3% by the end of 2025, and dip slightly further to 6.2% by the end of 2026.
This updated forecast comes from Fannie Mae’s latest economic outlook and reflects a 0.3% downward revision from just one month ago. For context, Freddie Mac reports that the average 30-year rate currently sits at 6.65%, showing a modest 0.02% weekly decline.
🐷 RSL Piggy Points: What This Means for You
🐷 Lower mortgage rates = more buying power. If these predictions hold, 2025 could be a smart time to lock in a mortgage or refinance.
🐷 Fannie Mae now expects 4.95 million home sales in 2025, up slightly from its previous forecast of 4.90 million.
🐷 Only one rate cut expected this year — likely in September, with two more to follow in 2026.
🐷 New home construction outlook remains steady, but builders could benefit from rate drops and less need for incentives.
Market Forces at Play
“While our latest forecast calls for a period of modestly slower economic growth, historically, interest rates have been the most important driver of home sales,” says Mark Palim, Chief Economist at Fannie Mae. In other words — when rates go down, buyers come off the sidelines.
Meanwhile, builders are keeping an eye on materials costs. Tariffs on lumber and supplies are putting upward pressure on prices, but falling rates could ease the need for builder concessions, helping preserve builder profit margins.
The Fed Factor
Many had anticipated two Fed rate cuts in 2025, but Fannie Mae is forecasting just one cut this year — and not until September. The Federal Reserve, balancing its dual mandate of full employment and price stability, is keeping a close eye on inflation, especially with tariff-related price pressures still in the mix.
🏁 RSL Perspective
At ReadySetLoan, we always keep our eye on the finish line — and the path to homeownership. While mortgage rates are moving in the right direction, the real opportunity lies in being prepared. Whether you’re buying your first home, upgrading, or exploring a refinance, understanding how market shifts impact you is essential.
Our expert team at ReadySetLoan is here to help you make sense of these economic updates and prepare a strategy that puts you ahead of the pack. Don’t wait until rates drop to start the conversation — your winning move starts now.
👉 Let ReadySetLoan be your educational partner and mortgage guide — every step of the way. Visit ReadySetLoan to get started.
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