This Week’s Mortgage Rate Predictions, March 10-16, 2025
Mortgage loan interest rates are on a downward trend, and the average interest rate is 30 years fixed mortgage loan In the last month, it dropped from about 6.9% to around 6.6%. But a shaky economy could freeze the housing market for some time.
In a Sunday interview President Donald Trump Refusing to rule out a full-scale recession has left our stock rolling. Potential homebuyers are making for what Trump now calls a higher inflation rate and a slowdown in the job market.
Tax transactions this week
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Higher unemployment rates reduce consumer spending and slow down demand, which often leads to lower mortgage rates. Colin Robertsona mortgage industry expert and founder of the truth about the mortgage website. “Marginal interest rates could be in a difficult position due to uncertainty in tariffs, trade and government spending,” Robertson added.
Housing giant Fannie Mae expects the average mortgage rate to remain above 6.5% for most of the year. Lenders set interest rates based on a range of factors, including investor expectations and the Federal Reserve’s monetary policy. Any shift in the economic outlook is likely to change collateral forecasts in the coming months.
What led to lower mortgage rates this week?
The growing focus on the Trump administration’s economic agenda has reduced investor confidence in the stock market and increased demand for bonds, thus lowering yields. Bond yields fell to lower as popular 30-year fixed-rate mortgages are closely linked to 10-year Treasury notes Borrowing fees for home buyers.
When lower mortgage rates are based on expectations of slower economic growth, “this is far from an ideal economic environment” Matt Koyeran economist of Moody’s analysis. “This is not a rose-colored photo,” Corlia said.
If family incomes cannot keep up with the high cost of living, a slightly lower home loan rate will not change the housing affordability equation. As shown below, today’s rates are still higher than last September.
What impact does the Fed have on interest rates?
The biggest question is how new job data and fiscal tightening will What affects the Fed Adjust interest rates in the coming months. Although the Fed does not set mortgage rates directly, changes in its benchmark federal funding rate will affect other consumer lending rates, such as home loans.
Inflation has tripled after signs of a sustained slowdown in late 2024. However, it is unlikely that the central bank will make any cuts at its upcoming meeting on March 19. New York Forum On Friday, Fed Chairman Jerome Powell reiterated the unpredictable impact of government policies that require interest rates to be kept stable. “We have the ability to wait for a clearer wait,” Powell said.
The market expects that the Fed can resume lowering interest rates in May or June if the risk of an unemployment recession is clear. The wave of federal layoffs and layoffs has not been reflected as a continuing trend in labor data. “To change its policy stance, the Fed will need more than a month of negative employment data.” Julia Pollakchief economist at Ziprecruiter.
Compared to today’s mortgage 2% interest rate In a pandemic era, experts say the rock bottom rate will not return unless there is another serious recession. While rates may continue to decline, they are unlikely to fall below 6% by the end of 2025.
Expert skills for home buyers
and Spring home buying season With a quick approach, potential homebuyers wonder whether to enter the market or continue to wait outside the market. It’s never a good idea to rush into Buy a house No clear budget was established.
Here is what the experts suggest before buying a home:
💰Build your credit score. Your credit score will help determine if you are eligible for a mortgage and at what interest rate. one Credit Score At 740 or higher, it will help you get lower interest rates.
💰 Save a bigger down payment. Bigger down payment Allows you to take out a smaller mortgage and get a lower interest rate from the lender. If you can afford it, a down payment of at least 20% will also eliminate private mortgage insurance.
💰Shopping Mortgage Lender. Comparing loan offers from multiple mortgage lenders can help you Negotiate higher rates. Experts recommend getting at least two to three loan estimates from different lenders.
💰 Consider the mortgage point. You can get a lower mortgage rate by purchasing Mortgage pointeach point costs 1% of the total loan amount. One mortgage point equals your mortgage rate drops by 0.25%.
