As we navigate 2025, hopeful homebuyers and current homeowners continue to follow economic headlines—especially when it comes to the Federal Reserve. But if you’re making decisions about buying or refinancing a home based solely on what the Fed is doing, you might be missing the full picture when it comes to mortgage rates in 2025.

At North Star Mortgage Network Inc., we believe in full transparency. The reality is this: the Fed’s moves do not directly set mortgage rates, and relying too heavily on Fed announcements could keep you on the sidelines longer than necessary.

What Really Affects Mortgage Rates in 2025?

The Federal Reserve does influence the direction of borrowing costs by affecting short-term rates, investor sentiment, and bond markets like the 10-year U.S. Treasury. But the actual path of mortgage rates in 2025 is shaped by several other factors:

• Inflation expectations
• Global economic conditions
• Supply and demand in the mortgage-backed securities (MBS) market
• Investor confidence and long-term yield trends

For example, in late 2024, the Fed reduced its federal funds rate several times, but mortgage rates actually climbed. Between mid-September and late December, even as the Fed cut its rate by 50 basis points, the average 30-year fixed mortgage rose from 6.09% to 6.85%.

This disconnect is a reminder that mortgage rates 2025 are being shaped by much more than just what comes out of a Fed press conference.

Education Is the Antidote to Misinformation

Many buyers think that if the Fed cuts rates, mortgage rates will automatically plummet. That simply isn’t true—and the spread of this myth across social media has added to the confusion.

We often hear,
“I saw on TikTok that rates are falling because of the Fed. Should I wait to buy?”

Our answer: Don’t make real estate decisions based on short-term headlines. Instead, base them on your financial goals, current affordability, and the real-time numbers—not speculation.

That’s why we offer tools like the Mortgage Offer Double Check —a no-obligation way to compare any rate or loan scenario you’ve been offered.

Let’s Clear the Air About Mortgage Rates in 2025

If you’re in the market to buy, refinance, or just want clarity on what’s really driving mortgage rates 2025, we’re here to help. At North Star Mortgage, we go beyond surface-level advice. We break down how the market truly works and help you make confident, informed decisions—no matter what the headlines say.

Clients who understand the “why” behind mortgage movements are more empowered, more prepared, and far less likely to fall for hype. That’s the foundation of long-term trust, and that’s why our past clients consistently refer friends and family our way.