Most analysts predicted mortgage rates would stay in the mid-6% range for 2025, but rising inflation has pushed them back over 7%. This unexpected rise underscores the difficulty in forecasting rates accurately.
Despite expectations of falling rates throughout 2024, the average 30-year fixed rate mortgage remained high at 6.72%, illustrating the unpredictability of the housing market and inflation's impact on mortgage predictions.
The consensus among forecasters is bleak for 2025; few believe rates will drop into the 5s, marking a significant shift in predictions compared to previous years where optimism abounded.
With inflation data not performing as expected, Fed Chairman Jerome Powell's shift in language has prompted a market response that has re-established rates in the 7% range, challenging previous forecasts.
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