Mortgage rates have seen a notable uptick in the early days of 2025. As of January 10, the average rate for a 30-year fixed mortgage stands at 7.03%, reflecting a 0.08% increase from the previous week.
Meanwhile, the 15-year fixed mortgage rate has risen to 6.34%, up by 0.06%. These shifts mark the fourth consecutive week of rising rates, as economic factors, inflation concerns, and market conditions continue to shape the housing landscape.
Experts note that despite the Federal Reserve’s recent cuts to its benchmark interest rate, mortgage rates remain high. The Fed’s decision to lower interest rates in late 2023 and into 2024 had initially sparked hopes for relief among prospective homebuyers, after a period of soaring rates. However, the road to affordable mortgage rates is proving to be longer than anticipated.
While some economists have speculated that potential changes in fiscal policy, particularly under President-elect Donald Trump’s proposed tax cuts and tariffs, could drive inflation higher, resulting in slower interest rate reductions, the outlook for 2025 remains uncertain. The market could continue to experience volatility, with the potential for mortgage rates to remain above 6% for the foreseeable future.
The Federal Reserve’s interest rate cuts, aimed at curbing inflation, have been beneficial for some sectors of the economy. However, mortgage rates are largely influenced by investor expectations, bond market activity, and broader economic conditions, making them less directly tied to the Fed’s decisions.
Despite these challenges, economists predict that the average rate for a 30-year fixed mortgage will likely range between 5% and 7% in 2025, with most forecasts placing it closer to 6.4% by the year’s end. This suggests that, while mortgage rates may see some relief, they may not return to the low levels many buyers had hoped for in the wake of the pandemic.
Different types of mortgages come with varying interest rates and terms. As of January 10, 2025:
- 30-year fixed-rate mortgage: 7.03% (up 0.08% from last week)
- 15-year fixed-rate mortgage: 6.34% (up 0.06% from last week)
- 5/1 ARM: 6.55% (up 0.03% from last week)
- 10-year fixed-rate mortgage: 6.24% (up 0.03% from last week)
- 30-year fixed-rate jumbo mortgage: 7.11% (up 0.08% from last week)
The most common mortgage terms are 15 and 30 years, with fixed-rate options offering stability over the life of the loan. Adjustable-rate mortgages (ARMs), such as the 5/1 ARM, typically offer lower rates in the initial years but may increase over time based on market conditions.
With input from the New York Times, FOX Business, and CNET.
