Mortgage Rates Today, Dec. 31, 2024: Our Forecasts for Mortgage Rates in 2025
The average 30-year fixed rate mortgage is 6.92% today, a decrease of 0.02% since yesterday. The 15-year fixed mortgage rate stands at 6.01%, the same as one day ago. The 30-year FHA mortgage now averages 6.18%, having risen by 0.03. Meanwhile, the 30-year jumbo mortgage rate is 7.36%, reflecting no change.
In brief
The late Harvard economist John Kenneth Galbraith once observed, "The only function of economic forecasting is to make astrology look respectable." And he was right.
There are so many variables in the global economy that even the most sophisticated modeling can't anticipate them all. Still, it's a part of the human condition to look ahead and wonder. So, let's give it a go.
Mortgage rates haven't been moving far
Mortgage News Daily made an interesting point last Friday. For all the ups and downs that bring us pain and joy, overall mortgage rates haven't moved all that far over the last couple of years.
Look at what the downloaded data from Freddie Mac's archives tell us about average rates for 30-year, fixed-rate mortgages (FRMs).
In the last week of 2022, that average rate was 6.42%. In the last week of 2023, it was 6.61%. In the last full week of 2024, it was 6.85%.
Yes, of course, we've had plenty of highs and lows over the last couple of years. The peak was 7.79% in October 2023. And the lowest point was 6.08% in September 2024.
But these have been relatively brief. The trick is to duck out for the highs and seize the lows.
But that is so much easier to say than do. If you have a mortgage that's more than 1% (100 basis points) higher than the rate you can get now, you should seriously explore the possibility of refinancing.
Mortgage rates might not move far in 2025 or 2026
Worrying signs
Last Friday, Barron's said: "The last mile in getting inflation down could still prove to be exceptionally hard. ... The Fed probably won’t do what everyone currently expects. Chair Jerome Powell already surprised markets by scaling back rate-cut plans for next year. The past few years, traders have expected the Fed to cut deeper than it has — in fact, the Fed’s own predictions for interest rates have also proven to be off base.
Right now, bond investors (some of whom determine mortgage rates) aren't optimistic, according to Sunday's Wall Street Journal. It reports, "In recent weeks, money managers have been dumping Treasurys, while savers have been rushing out of longer-term bond funds."
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.92% | 6.96% | -0.02% | +0.22% |
| 15-Year Fixed | 6.01% | 6.07% | +0% | +0.22% |
| 30-Year Fixed FHA | 6.18% | 7.01% | +0.03% | +0.19% |
| 30-Year Fixed VA | 6.24% | 6.4% | +0.03% | +0.25% |
| 30-Year Fixed USDA | 6.19% | 6.33% | +0% | +0.31% |
| 30-Year Fixed Jumbo | 7.36% | 7.39% | +0% | +0.21% |
| 5/6 Year ARM | 6.83% | 6.87% | -0.06% | +0.24% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.99% | 7.03% | +-0% | +0.32% |
| 15-Year Fixed | 6.01% | 6.07% | +0.01% | +0.36% |
| 30-Year Fixed FHA | 6.17% | 7% | +0.03% | +0.2% |
| 30-Year Fixed VA | 6.25% | 6.41% | +0.04% | +0.25% |
| 5/6 Year ARM | 6.92% | 6.95% | -0.06% | +0.29% |
Coming up
Mortgage rates today and tomorrow
Mortgage rates rarely respond to S&P Case-Shiller home price indexes (20 cities). That's today's sole report, and it covers November.
As we described yesterday, we're likely looking at market sentiment when we seek drivers to changes in mortgage rates. Also, of course, news reports that affect the economy can always deliver movement.
Markets will be closed tomorrow for the New Year holiday. And mortgage rates shouldn't move that day, so we won't be publishing this daily column.
We'll be back on Thursday. And, in the meantime, we wish all our readers the happiest of new years.
Thursday
Thursday brings the first of this week's economic reports that typically has the potential to move mortgage rates perceptibly. That covers construction spending in November.
According to MarketWatch, markets are expecting that to rise by 0.3%, slower than October's 0.4%. A number lower than 0.3% might nudge mortgage rates downward while a higher one might push them upward. If the forecast proves correct, we may see no change.
However, construction spending rarely has a sustained or appreciable effect on mortgage rates. For a report that does, we'll have to wait until next week.
