Mortgage rates in 2024 have been volatile due to factors in the bond market and the Federal Reserve’s monetary policy. While the federal funds rate doesn’t directly impact mortgage rates, it influences other consumer debt, like credit cards and auto loans. Inflation has been the primary driver of rate fluctuations, with the bond market (UMBS) facing both technical and fundamental challenges, compounded by the Fed’s actions to curb inflation. Since the Fed began lowering rates, mortgage rates have risen sharply due to internal disagreements about future cuts and inconsistent economic data.
We remain optimistic about mortgage rates in 2025! Long-term, inflation is expected to ease toward the Fed’s 2% target, which should help bring mortgage rates down, potentially to the low 6% or even the 5% range by 2025. However, as rates drop, an estimated 5 million new buyers may enter the market, potentially pushing housing prices higher. We recommend taking advantage of current rates while they remain below our forecasted levels.
Robby Redmond
Owner, Redmond Mortgage Group
NMLS 909550
