Economists’ 2025 housing market forecasts call for mortgage rates to remain above 6% next year.

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Los Angeles (AP) – Home buyers hoping for attractive mortgage rates next year may be disappointed.

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That’s based on the 2025 housing forecasts of several economists, many of which were released in the past few weeks.

Most of the eight forecasts want the average 30-year mortgage rate to stay above 6% next year, with some including as high as 6.8%.

That range will be largely consistent with where prices have risen this year. The average rate fell to 6.08% in September _ a 2-year low – and rose to 7.22% in May, according to mortgage broker Freddie Mac. The average rate was 6.6% this week.

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“Even at the end of next year, it is difficult to see loan rates below 6%. .

The biggest wildcard in mortgage rates next year is that President-elect Donald Trump’s big policy plans will end up driving inflation and the national debt higher, which could keep mortgage rates higher. That’s because what happens with inflation, the US deficit and the economy can affect the movement of the US 10-year Treasury yield, which lenders use as a guide to mortgage rates.

Trump says he wants to impose tariffs on foreign goods, cut taxes and ease regulations, policies that would stimulate the economy, but also fuel inflation and increase the US government’s debt.

Economists at Redfin have predicted that the average 30-year mortgage rate will reach 6.8% next year, citing expectations that Trump’s proposed tax cuts will increase the US deficit and his tax plan could increase inflation, ultimately raising mortgage rates. .

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However, mortgage rates could drop to the low 6% range if the economy weakens or if tax cuts and tax cuts are rolled back, according to the forecast.

Several forecasts are optimistic about how the average 30-year mortgage rate will drop by 2025. Fitch Ratings sees it ranging from 5.8% to 6.4%, while TD Economics predicts the rate will drop to 5.8% by the end of the year.

The average rate is still below its historical average of 7% going back to 1971. But that’s not much comfort to home buyers now because over the past 10 years house prices have risen much faster than incomes.

“So it’s kind of like having this double on a purchase that someone 30 years ago with a 6% rate didn’t have to deal with,” said Lisa Sturtevant, chief economist at Bright MLS.

Rates in the 6% range would mean that most homeowners with a mortgage would have to take out a higher amount than they currently have if they chose to sell their home and refinance. More than four out of five homeowners with a mortgage have an available rate of less than 6%, according to Realtor.com.

Economists see bright spots for homebuyers next year. Those who can afford to buy regardless of where the rates are, or who can bypass them entirely by getting into the benefits of home equity, should benefit from the continued increase in real estate and the moderate pace of home price growth.

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