‘Mortgage rates will pull back:’ 4 pros predict where mortgage rates will go in February 2025

Where experts expect mortgage rates to land this month

By Alisa WolfsonFollow

Updated: Feb. 6, 2025 at 9:53 a.m. ET

On the heels of the Federal Reserve’s January 28-29 meeting where interest rates were held stable at 4.25-4.5%, home buyers may be wondering what’s in store for mortgage rates. We asked four pros.

Mortgage rates will drop. – Holden Lewis, home and mortgage expert at NerdWallet 

For his part, Lewis says mortgage rates are poised to drop in February, after climbing above 7% in January. “The direction of consumer prices will have the strongest effect on mortgage rates in February. The core inflation rate should decline further, giving bond yields and mortgage rates room to fall, but not by a lot,” says Lewis. 

Mortgage rates will be near 6.5%. – Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors

Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors predicts mortgage rates are expected to be near 6.5% in February. “The 10-year Treasury rate, which is closely aligned with mortgage rates, has fallen to 4.5% after climbing closer to 5% in early January. Mortgage rates should, in turn, start to decline,” says Lautz.  

Mortgage rates will stay close to where they are. – Chip Lupo, analyst at WalletHub 

While there’s a potential for some relief, Chip Lupo, analyst at WalletHub says buyers should be prepared for mortgage rates to stay in this general range for the short term. “Mortgage rates in February will play a key role in shaping housing market activity. If rates remain near current levels, around 6.5% to 7% for a 30-year fixed mortgage, we could see continued affordability challenges, especially for first-time buyers. This could lead to slower home sales and rising inventory as some buyers are priced out,” says Lupo.

What does this all mean for the housing market?

Looking at the month ahead, high mortgage rates will continue to keep home sales on ice, says McBride. “It would take a lot of movement in mortgage rates to move the needle on the housing market,” he says. 

Lewis too says affordability remains a challenge. “It will take people longer to buy homes as they wrestle with affordability. As homes linger on the market, the inventory of for-sale homes will keep rising. This increase in supply will diminish upward pressure on prices. Home prices will rise this spring, but not as swiftly as they rose in the past,” says Lewis.

While stabilization in mortgage interest rates is good news for home shoppers who are looking to make a purchase, Lautz says it’s important to note that for one-third of the housing market, home buyers are purchasing their homes with cash and not financing. “They are not influenced by mortgage rates,” she says.

With mortgage rates at their current levels, McBride says there aren’t a whole lot of refinancing candidates. “Whether or not to take out a mortgage in February will be determined by your closing date or a need to access equity, not because rates are a screaming bargain, they most certainly are not,” says McBride.

If you’re financially ready to purchase a home, there’s no reason to wait, because mortgage rates are expected to stay relatively stable. “While there could be weekly volatility in the mortgage rate, it is not expected to have wild swings that would make or break a transaction. Home buyers who are financially ready to purchase should also keep in mind that mortgage rates are one component to housing affordability. Home prices are expected to increase and that also impacts the overall monthly mortgage payment,” says Lautz

About the Author

Alisa WolfsonFollow

Alisa Wolfson is a writer for MarketWatch Picks, writing about savings, retirement, investing and other personal finance topics.