Forecast: Mortgages to Hover From 6.15% to 7.55% in 2025

Drum roll: mortgage rates could either dip or tick up slightly next year.

Home loan pricing will likely run between 6.15 percent and 7.55 percent, according to a forecast by the Orange County Register, based on 52 years worth of Freddie Mac mortgage statistics.

The forecast is based on the average difference between the year’s high and low rate — 1.4 percentage points — and applied it to the 6.85 percent rate at year-end 2024.

In short, the ups and downs of next year’s mortgage rates won’t be dramatic. In fact, the rates will likely fall beneath historic norms, according to the newspaper’s analysis by Jonathan Lansner.

This year, mortgage rates averaged 6.72 percent, which ranks as the 31st-highest yearly rate in 52 years. A typical mortgage rate over the past half century is 7.7 percent. The worst rate for borrowers was in 1981, at a typical 16.7 percent.

For 2024, the 6.72 percent average rate was 0.09 percent less than the 6.81 percent last year. It’s the 24th biggest dip since 1972.

But if the year’s final weekly rate of 6.85 percent is stacked up against the end of 2023, rates rose by 0.24 percentage points. That’s the 16th largest increase, by this measurement.

This year’s highest rate of 7.22 percent came the week of May 22. Looking back 52 years, that ranks as only the 30th highest on record, according to the Register.

There’s a 12 percent difference in the size of the mortgage check between this year’s highest and lowest rates. That ranks No. 27 over 52 years and under the 14 percent average spread.

The payment gap was 55 percent in 2022 when the Federal Reserve reversed its pandemic-era cheap money policy and started hiking interest rates.

— Dana Bartholomew