One question that seems to be on everyone’s mind these days is: When will mortgage rates finally come down? After years of rising rates and the constant rollercoaster of 2024, we’re all hoping for some relief.

While no one can predict mortgage rates with absolute certainty, experts are offering a clearer picture of what we might see heading into 2025. Here’s what the latest forecasts suggest.

Mortgage Rates: A Smoother Ride in 2025?

After months of volatility, most recent forecasts hint that rates will stabilize and ease slightly over the next year. While they may not drop dramatically to historic lows, some relief compared to current levels is expected.

As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), puts it: “While mortgage rates remain elevated, they are expected to stabilize.”

This stabilization is a huge win for buyers and sellers, offering more predictability than the dramatic swings we’ve seen over the last couple of years.

What’s Driving Mortgage Rate Movement?

Predicting mortgage rates is one of the toughest calls in the housing market, as they depend on a variety of complex economic factors. They are not set by the Federal Reserve, but they are certainly influenced by its actions.

Here are the key players that’ll shape the road ahead:

Inflation

This is the single biggest factor. If inflation continues to cool, we could see rates dip further, creating more favorable borrowing conditions. Conversely, persistent inflation could keep rates higher for longer.

Unemployment Rates and the Job Market

The Federal Reserve closely watches the job market when making decisions about the economy. The Fed’s actions (such as adjusting the Federal Funds Rate) impact financial markets, which directly influence mortgage rates. A sudden loosening or tightening of policy based on the job outlook can steer rates quickly.

Government Policies

With new fiscal and monetary policies potentially on the horizon, changes from Washington—especially those affecting the national debt or economic stimulus—could also steer rates in a new direction.

The Bottom Line

Don’t wait for rates to crash; wait for them to stabilize. The current expert consensus points toward a more stable and slightly easing rate environment in 2025, which should encourage more activity in the housing market.