Before we get into predictions from four major housing and mortgage industry participants regarding where mortgage rates are headed, you should know it would probably be easier to predict the weather in any given region 2 years from the date of this writing than it would be to predict the mortgage rates even 3 months from now.
Weather is governed by seasons. The direction of mortgage rates is most heavily influenced by movements in the financial markets. As we’ll see later, that brings into play a lot of different factors that can make mortgage rate prediction a lot more like picking the winning lotto numbers. With that said, here are the best guesses of some organizations whose business is inextricably tied to mortgages.
Freddie Mac
Freddie Mac doesn’t go so far as to predict a specific mortgage rate in its November 2023 forecast. However, the major backer of conventional loans does say that it doesn’t anticipate rates falling below 6% any time soon because the Federal Reserve (Fed) has indicated a preference to keep rates higher for longer.
Fannie Mae
Fannie Mae thinks rates will get up as high as 7.3% for an annual average in 2024 before falling back to 6.9% by 2025. Along with Freddie Mac, Fannie Mae is the other major investor in conforming conventional loans.
National Association of REALTORS® (NAR)
NAR has avoided making any new predictions specific to where mortgage rates are going to be in its latest economic and housing outlook presentations, but the trade group does say it believes mortgage rates have reached their peak. Based on that, they can only go down from here.
National Association of Home Builders
The National Association of Home Builders believes that interest rates will be averaging 7.04% for the 30-year fixed in 2024 before dipping to 5.81% in 2025. The forecast was last updated in November 2023.
