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Inflation continues to wander, and the Federal Reserve is still unable to further lower its benchmark rate. However, April could potentially slow the economy and reduce new uncertainty after the election, Mortgage Insider said.
“We’re looking forward to seeing you in the future,” said Greg McBride, Bankrate’s chief financial analyst. “But when we see more inflationary pressure, any pullback will be limited.”
For months, mortgage rates have been kept high by a combination of still strong economies, inflation fears and growing concerns about rising federal deficits.
I hope that mortgage interest rates will return to the 5% range. According to Bankrate’s weekly lender survey, the average 30-year mortgage rate fell from 7% last summer, falling from 6.2% to 6.2% in September, and was reversing by over 7% by the end of 2024. However, as of March 26th, prices had fallen to 6.76%.
The Federal Reserve does not directly set mortgage prices, but central banks have an impact on them. The Fed lowered its benchmark rate three times last year, but it remained stable at its January meeting.
learn more: How the Fed will affect mortgage rates
Will mortgage interest rates drop again?
The 6% mortgage chance failed. Fannie May predicts interest rates will fall to 6.3% by the end of the year, but the Mortgage Bankers Association expects 30-year interest rates to fall to 6.5% by the end of 2025.
“Mortgage interest rates will continue to fall through 2025, but could remain in the 6% medium term range for the majority of the year. says Lisa Sturtevant, chief economist at Bright MLS, a large listing service in the Mid-Atlantic region.
learn more: Housing Market Trends to Watch in 2025
Current mortgage rate trends
The higher the mortgage rate, the more homeowners cling to low-cost loans, a trend known as the “lock-in effect.” Meanwhile, the median domestic home prices were recorded at $398,400 in February, according to the National Association of Realtors.
Bankrate’s weekly mortgage rate average is slightly different from the statistics reported by Freddie Mac, a government-sponsored company that purchases mortgages and packages them as securities. Bank rates tend to be higher as they include origination points and other costs, but Freddie Mac removes these numbers and reports them individually. However, both Bankrate and Freddie Macs report similar trends in overall mortgage rates.
What should I do if I get a mortgage this year?
- Improve your credit score. A low credit score won’t prevent you from taking a loan, but it can make all the difference between getting the lowest possible rate and the more expensive terms of borrowing. The highest mortgage rates are sent to the borrower with the highest credit score. Usually at least 780.
- Save money for down payment. Paying more money ahead will help lower mortgage rates. If you have 20%, avoid mortgage insurance and add costs to your loan. If you are a first-time home buyer and can’t cover a 20% down payment, there are useful loans, grants and programs. Eligibility requirements vary from program to program, but are often based on factors like income.
- Understand the debt-to-income ratio. Your debt income (DTI) ratio compares your monthly total debt payments to the amount you owe and the amount you earn, especially your monthly total monthly income. Don’t know how to understand the DTI ratio? Bankrate has a calculator for that.
