Blog posted date Jan 29, 2025
By Don Almeida- Mortgage Expert and President of Happy Home Mortgage
After weeks of steady increases, mortgage rates have finally dipped below 7%, providing a welcome relief for homebuyers. The average 30-year fixed mortgage rate now sits at 6.96%, largely due to a drop in U.S. Treasury bond yields. Although rates are still higher than historical averages, there’s growing optimism that further declines could be on the horizon. As a Wholesale Mortgage Brokerage we are seeing rates much lower this week and as low as 5.99% for the most qualified borrowers with 20% or more down payments. Despite some unpredictability in the market, the potential for mortgage rates to dip into the 5% range has many homebuyers and industry professionals feeling optimistic. Whether or not this becomes a reality, the outlook for the rest of the year appears to offer more opportunities than challenges.
Market analysts are predicting some stability in the near term. Joel Kan, Deputy Chief Economist at the Mortgage Bankers Association, anticipates rates will remain between 6.5% and 7% throughout the year. Similarly, Mark Palim, Chief Economist at Fannie Mae, expects averages to hover around 6.5%. While these forecasts point to steadiness, other projections hint at a more hopeful trend for borrowers.
Longforecast.com suggests that mortgage rates could continue to decline as the summer approaches, potentially dropping to 6% by September. Improvements in economic conditions and potential shifts in Federal Reserve policy are seen as key drivers of these reductions. Some experts even speculate that rates could touch the 5% range later this year, which would be a significant boon for the housing market.
What’s fueling these speculations? A combination of factors may come into play, including easing inflationary pressures as federal deficit spending slows and global trade stabilizes. Bond yields, a primary driver of mortgage rates, could also trend downward, offering further opportunities for reduced borrowing costs. While uncertainties remain, these positive signals are encouraging.
If you’re considering buying a home or refinancing, now might be the perfect time to start planning. Staying informed and working with a trusted mortgage advisor can help you take advantage of any favorable changes in the market. With a bit of patience and preparation, you could be well-positioned to secure a great deal and turn your homeownership dreams into reality.
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