At North Star Mortgage Network, we understand the importance of staying informed about interest rate trends. According to the Fannie Mae mortgage rate forecast, mortgage rates could see a significant drop by the end of 2025. If you’ve been waiting to buy or refinance, this may be the window you’ve been hoping for.

Why the Fannie Mae Mortgage Rate Forecast Matters

Fannie Mae projects that the average 30-year fixed mortgage rate will fall to 6.1% by the end of 2025, and further decline to 5.8% by the end of 2026. That’s slightly lower than their April projection, offering new optimism for both buyers and refinancers.

Right now, however, the market still has ground to cover. As of last week, Freddie Mac reported 30-year mortgage rates at 6.81%, and the 10-year Treasury yield — which closely influences mortgage pricing — surged to 4.6% amid U.S. credit rating concerns.

What’s Behind the Fannie Mae Forecast?

  • Treasury Yields: Forecasted to average 4.2% in Q2 of 2025.
  • Federal Funds Rate: Expected to stay in the 4.25%–4.5% range until late 2025, then drop to around 3.9%.
  • Federal Reserve Cuts: Likely to see one or two rate cuts before year-end.

These predictions are tied to anticipated easing inflation and slower but steady economic growth.

Fannie Mae’s Housing and Mortgage Outlook

Alongside lower rates, Fannie Mae expects:

  • Single-family home sales to reach 4.92 million units in 2025.
  • Mortgage originations to grow to $1.99 trillion in 2025 and $2.38 trillion in 2026.

Not everyone agrees — some analysts, like Michael Esienga of First American Properties, are warning of rising inventory and falling pending sales as signals of a possible market correction.

What This Means for Buyers and Homeowners

If the Fannie Mae mortgage rate forecast holds true, borrowers could benefit in multiple ways:

  • Lower borrowing costs for homebuyers
  • Better refinancing opportunities
  • Increased home affordability across the board

Should You Wait or Act Now?

Forecasts can shift, and every financial situation is different. While it’s exciting to hear rates may fall, locking in now could still make sense depending on your goals. That’s where we come in.

At North Star Mortgage Network, we can walk you through your options and run custom scenarios to help you make the most informed move.

Call us today at 904-613-7700 for personalized advice or visit us online to get started.

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