If you’ve been sitting on the sidelines waiting for mortgage rates to finally cool off, you’re not alone. But let’s cut to the chase: mortgage rates hit 7.4% in January 2025, and while they’ve dipped slightly since, we’re still living in the 6.5% to 7% zone. Not exactly the relief many buyers were hoping for.
What’s Holding Mortgage Rates So High?
Many expected mortgage rates to ease once the Federal Reserve began cutting rates in late 2024 or as inflation cooled. But the reality? Rates have barely budged. As of late April 2025, the average 30-year fixed mortgage rate sat at 6.81% (according to Freddie Mac).
Why? It’s a combination of:
- Sticky inflation that refuses to drop quickly
- A cautious Federal Reserve holding rates steady in “wait and see” mode
- Trade policy changes and tariffs adding upward pressure
The Fed’s “Wait and See” Strategy
In May, the Fed left interest rates unchanged for the third time this year, keeping the benchmark range at 4.25%–4.5%. Fed Chair Jerome Powell made it clear: “We’re really not at all clear what it is we should do.”—not exactly reassuring words for buyers hoping for a quick drop.
With policy shifts, immigration debates, and global trade uncertainty in play, the Fed is firmly in neutral. That means mortgage rates may be stuck longer than expected.
Should You Wait to Buy?
It’s a fair question—and experts are weighing in. Fred Bolstad of U.S. Bank says if you can afford the payment and love the house, don’t wait. Lauren Young</strong, Chief Economist at NAR, points out that when the Fed cut rates three times last fall, mortgage rates actually rose. So relying on Fed cuts to bring relief could backfire.
2025 Mortgage Rate Predictions: What the Experts Say
Here’s what major institutions are forecasting for the rest of the year and beyond:
- NAHB: Mid-6% range, possibly higher in 2026
- Fannie Mae: 6.2% by year-end
- Freddie Mac: “Higher for longer” stance
- Mortgage Bankers Association: 7% in Q2, 6.7% by year-end
- J.P. Morgan: 6.7% average by year-end
- Wells Fargo: Slightly more optimistic at 6.5%
Notice the trend? No one is predicting a return to 5%—and certainly not 4%—anytime soon.
Is Now a Smart Time to Refinance?
Homeowners are also wondering: should I refinance in 2025? Gene Borick from Empire Home Loans says, “It depends.” If you’re looking to consolidate debt, it might make sense. But if your goal is to lower your monthly payment, that’s a tougher sell with refinance rates still over 6%.
And here’s a stat that drives it home: Over 40% of U.S. mortgages were originated during 2020–2021, when rates were at rock-bottom. Unless you bought in 2023 or later at a higher rate, refinancing now probably won’t save you much.
What Should Buyers Be Doing Instead?
Rather than trying to time the market, here’s what savvy buyers should be doing in 2025:
- Know your budget and monthly payment comfort zone
- Work on your credit score to secure the best rate possible
- Shop with multiple lenders to compare offers
- Be ready to act fast if rates dip
As Matt Vernon with Bank of America put it: “If the house is right and the payments are affordable, it could be the right time to move.”
The Bottom Line
Mortgage rates in 2025 are likely to stay in the 6.5% to 7% range for the foreseeable future. The Fed is cautious, inflation is persistent, and economic uncertainty remains high. But waiting for a “perfect” rate could mean missing out altogether.
So if you’re financially ready, stay engaged. Stay smart. And don’t wait for the headlines to tell you when it’s time to move—make the decision that’s right for you.
