Mortgage rates are sitting at 6.38%, according to the latest data from Freddie Mac – up slightly from earlier this year, but still lower than last year (in January 2025, rates rose to a little over 7%). (You can see mortgage rates in your area herefrom our marketing partner Bankrate.) So what’s next for mortgage rates? We asked six experts.
While there’s little chance of rates going any lower, they’re likely to stay below 6% for the near term, predicts Jen Poniatowski, SVP of loan growth and market development at Key Mortgage. “Any downward movement will be incremental rather than significant, preventing meaningful change in the inflation or credit markets,” says Poniatowski.
But, of course, there are many factors that will determine whether rates go up or down – energy prices among them. After touching below 6% shortly before the oil price shock, mortgage rates will depend on whether oil prices bounce back or rise, says Lawrence Yun, chief economist and vice president of research at the National Retail Federation. Yun says: “If oil prices return to $70 per barrel, loan rates may return to 6%.
Zillow’s chief economist, Mischa Fisher, said that despite the high volatility, he expects mortgage rates to rise through most of April based on the hidden impact of energy prices. Electricity prices are front and center right now. Rising oil prices have fueled concerns about the fall in asset prices that tend to push up real estate prices.
For his part, Stephen Kates, a Bankrate financial analyst, notes that the rate of mortgage rates has risen by 0.5 percent since the end of March and is expected to remain at this level for the foreseeable future. “The Iran conflict and inflationary sentiment are pushing up Treasury yields, which in turn has pushed up mortgage rates,” says Kates.
As for the other factors that will move the needle in April, Kates says uncertainty about inflation is a key factor as it directly affects the 10-year Treasury yield, which backs 30-year mortgage rates. Kates says: “The credit spread, which is the difference between the two rates, increased slightly last month but remains within normal levels.
Credit rates closely follow the 10-year Treasury bill yielding much more than the Fed’s rate of interest. The first captures the expectations of financial markets regarding economic conditions in the medium term, during which the mortgage must be repaid, while the last part takes and deals with short-term economic problems, explains Francesco D’Acunto, a member of the faculty at the Georgetown McDonough Steers Institute of Global Real Assets. “For this reason, the forecast for credit rates in April ultimately depends on what will happen with the current source of uncertainty for the medium-term economic conditions, the war in Iran,” says D’Acunto.
As long as conflicts in the Middle East continue without resolution, Jeff DerGurahian at loanDepot says interest rates will remain high. “If signs of a resolution begin to appear, there is a possibility that rates will gradually decline closer to 6%,” says DerGurahian.
What could this mean for real estate?
Yun says that the housing buying season was expected to be the best in three years, with mortgage rates heading towards 6%, before the oil price shock. “If mortgage rates stay at or near 6.5%, real estate sales may not take off at all,” says Yun.
In addition, Kates says that the real estate market is already very depressed and is not likely to get any worse. “New home sales were weak in January but will likely recover a bit during the home buying season,” Kates says.
Because of the volatility, DerGurahian says it’s too early to know exactly how the spring market will play out. “Every move in rates is important when it comes to affordability and the way consumers think about buying, so a return closer to 6% will help, but there’s a good chance that this period will end up being a better market than what we’ve seen in the last few years if some of the uncertainty can be resolved,” says DerGurahian.
Would you consider buying now?
Specific numbers aside, trying to time mortgage payments is a gamble. Fisher says: “If the house fits your budget and lifestyle, it makes sense to move forward, especially since buyers can refinance later if rates drop. Plus, while the focus is on interest rates, it’s only one part of the overall business, says Poniatowski. “Credit structure, preparation and performance are equally important, especially in competitive markets.”
Another important thing that borrowers should know now is that adjustable rate loans are still worth considering. “While the recent trend in short-term rates has made ARMs a little less attractive compared to 30-year fixed rates, there are still options in the high 5% range for qualified buyers,” says DerGurahian. (You can see mortgage rates in your area here, from our marketing partner Bankrate.)
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