Homebuyers in the United States have struggled for most of the year, especially with surging home prices and elevated mortgage rates. Fortunately, the interest rates dropped in the past week, spurring a flurry of home purchases.
The average contract rate for the 30-year fixed-rate mortgage moved down in the week ending Nov. 27, falling by 0.03% to 6.81%, data from Freddie Mac showed.
Many are hoping rates will keep falling, especially with the Federal Reserve projecting more cuts next year. Forecasts vary, however, with some believing declines are unlikely in the last month of 2024. Here's what experts predict.
Rates Will Remain Stable
The Mortgage Bankers Association and Fannie Mae---a company that bundles and securitizes home loans---expect mortgage rates to remain relatively stable in December, with the average contract rate for the 30-year mortgage term averaging 6.6% at the end of the year.
Significant shifts in rates, such as a drop below 6%, are unlikely unless there are substantial changes in the country's economic conditions, per CNET.
That said, the Fed is expected to meet again this month, which could influence future rate cuts and slightly decrease mortgage rates. However, this is only possible if employment data and inflation weaken.
What Are the Predictions for 2025?
Mortgage rates are still unlikely to fall below 6% in 2025, according to predictions from other experts. In fact, it is anticipated that mortgage rates will hover around 6.2% by the end of next year, according to Business Insider.
Other experts suggest mortgage rates could fluctuate between 6% and 7%. Some forecasts also indicate the rates could be a more stable average of 6.5% throughout next year, CBS News reported.
Apart from mortgage rates, experts predict home prices to rise slightly from the current $434,720, but new construction homes on the market could give buyers more prospects and even more chances to score a property. That would be a stark contrast to this year when buyers struggled with a lack of inventory in the market, which pushed prices up further in a bid to meet soaring demand.
