Mortgage Rate Predictions for 2025: Will Rates Drop in April?
The current mortgage interest rates forecast is for rates to remain elevated compared to where they were pre-pandemic. The Federal Reserve has signaled its intention to act cautiously in 2025 — potentially utilizing only two rate cuts — and this could mean mortgage rates have less reason to fall as we progress through the year.
Right now, market watchers have their eyes fixed on President Trump’s tariffs, which could increase inflation and create a domino effect that would push up mortgage rates. That said, rates aren’t expected to move dramatically in either direction in April.
In the long term, high rates and low affordability will likely keep the housing market sluggish in 2025.
Mortgage rates forecast for April 2025
Last week, President Trump announced that he would impose tariffs on imported cars and some car parts beginning April 2. Tariffs can create inflationary pressure, potentially sending 10-year Treasury yields up, and in turn bringing up mortgage interest rates.
And, if rates do rise, we can’t necessarily expect the Federal Reserve to jump in with a rate cut. “The biggest takeaway from the March Fed meeting is that the Fed isn’t riding to the rescue anytime soon when it comes to interest rates,” observes Matt Schulz, LendingTree’s chief consumer finance analyst. And, with Fed rate cuts on hold, the chance of major interest rate movement is low.
In a best-case scenario, mortgage rates could fall closer to 6% at some point in 2025, but they aren’t expected to dip much lower than that — and rates could also go the other direction if the economy weakens, inflation rises or bond investors pull back due to economic uncertainty.
It’s almost certain that rates will remain high compared to the levels seen during the height of the COVID-19 pandemic, when average 30-year mortgage rates were around 2.65%. Those record lows, as nice as they were, might not ever be seen again in our lifetimes.
How does the Federal Reserve affect mortgage rates?
→ A Federal Reserve rate cut directly affects adjustable-rate mortgages, since their interest rates are calculated using a number — known as an index — that fluctuates with the broader economy. The Fed’s cuts are to the federal funds rate, which is a benchmark index.→ The Fed’s rate cuts indirectly impact fixed-rate mortgages, which can move more independently and, in some cases, can even move in the opposite direction of the federal funds rate. That said, when the federal funds rate drops, mortgage rates tend to follow. They can also drop in anticipation of a federal funds rate cut, as they did just before the Fed’s September 2024 rate cut.
Will home affordability improve in April?
Potential homebuyers shouldn’t expect significantly better affordability in April than they saw during most of the last few months.
Home prices
Historically, April is one of the most expensive months in which to buy a house. None of the best days of the year to purchase a home — the days on which you pay one of the lowest premiums — appear in April, according to an analysis by real estate data company ATTOM.
That said, the potential for some small price breaks is on the horizon. “Inventory has grown in recent weeks, which makes sense as we approach the prime homebuying season,” Schulz explains, adding that a growing inventory could help with affordability. “However, that may not matter much if the demand grows as well.”
Mortgage rates
The Federal Reserve declined to cut the federal funds rate at its meeting last month, removing that particular incentive for mortgage rates to move downward. The Fed could decide to make a rate cut at its next meeting on May 6 and 7, but as long as regulators continue to hold off, consumers aren’t likely to see significant rate drops.
Home affordability
Unfortunately, the housing market continues to be prohibitively expensive for many Americans. Nearly 90% of metro areas in the U.S. saw the median existing home price rise in the fourth quarter of 2024. In fact, median home prices have risen by 24% over the last four years, landing at $419,200 in the fourth quarter of 2024. To put that in perspective, the national median monthly mortgage payment homebuyers applied for was a hefty $2,205 as of February 2025.
Why is there a housing shortage?
High rates and the “mortgage rate lock-in” effect, which makes homeowners reluctant to sell, continue to drive up home prices. More than 8 in 10 homeowners with a mortgage have an interest rate below 6% as of the third quarter of 2024, according to data from the Federal Housing Finance Agency. That’s why they’ll likely need to see rates come down further before feeling like it’s time to venture back into the market.
Home sales are picking up slowly, but remain low. Purchase volume was 7% higher than this same time last year, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending March 21, 2025.
That’s no surprise in today’s tight housing market, but the market does continue to dish out a few curveballs. For instance, in 2024 the median existing home price overtook the median new home price for the first time since 1989, according to the National Association of Home Builders. This is a factor homebuyers should take into account as they shop, especially if they haven’t considered a new home up until now.
Current mortgage rates for April 2025
Mortgage rates predictions for refinancing in 2025
Refinancing doesn’t make sense for most homeowners sitting on the low rates they locked in before 2022. That’s when the market began its march upward — moving ever further from the sanguine rates of 2021 which, even at their highest point, barely exceeded 3%.
Refinance application volume was growing slowly over the course of 2025, but has already picked up significantly as we enter the spring homebuying season. In fact, March refinance volume has overtaken last year’s March numbers by 74%, according to the MBA’s data. If 2024 was any indication, the number of homeowners refinancing could pick up relatively quickly — during the first week of October 2024, refinance applications shot up to 159% higher than the same week in 2023 and tapered down slowly, ending the year at only 10% higher.
Who does refinancing make sense for right now?
A refinance might make sense for some borrowers as long as they know exactly what benefit they’ll be getting out of it. For example, if you’re refinancing an adjustable-rate mortgage (ARM) to a fixed-rate loan, converting equity to cash with a cash-out refinance or getting a new interest rate that will lower your payments.
It’s typically smart to hold off on a refinance until you could get a rate that’s at least 50 basis points Basis points are units used to measure changes in interest rates. One hundred basis points are equal to 1 percentage point, so 50 basis points are equal to 0.50%. lower than the one you already have — and ideally 75 to 100 basis points lower.
Should I wait to refinance after the Federal Reserve’s next interest rate cut?
If you can benefit from a refinance right now, it may make sense to act sooner rather than later because waiting for a rate cut could be a long wait. “I think significant improvement in interest rates is probably more than a month or two away,” Schulz says.”
Weigh how the savings you could achieve in the current market will affect you — if they’ll pull you back from the edge of financial desperation, it makes sense to act quickly. If you’d just like to save a little money, it could make sense to wait.
Current refinance rates for April 2025
Will mortgage rates go down in 2025?
Although pandemic-related inflation took longer to cool than expected, it is cooling. In fact, it’s held near pre-pandemic levels over the course of 2024 and 2025 so far. And, although mortgage rates marched fairly steadily upward from mid-September 2024 to mid-January 2025, they’ve now settled below 7% for more than nine weeks straight.
That said, the Fed is very likely to hold rates steady in the short term rather than make cuts. So, for now, getting into the market means making peace with a rate near 7%.
Ultimately, homebuyers should focus on what they can afford in the current market rather than obsessing over the future. “Shop around for rates,” Schulz urges. “Yes, rates are going to be high everywhere, but they can still vary significantly among lenders. Those differences can be a big deal because even a fraction of a point difference on an interest rate can save you hundreds or even thousands of dollars over the life of the mortgage.”
Will we see lower mortgage rates under the Trump presidency?
A new president doesn’t always have a notable impact on things like interest rates and inflation, but Trump and those around him have proposed privatizing Fannie Mae and Freddie Mac, imposing large tariffs, stripping the Fed of its autonomy and gutting the U.S. Department of Housing and Urban Development (HUD) — actions that would have major impacts on the housing market and the broader economy.It’s unclear which of these policies will actually materialize, but mainstream economists anticipate that many of them would result in rising inflation. In fact, 16 bipartisan, Nobel prize-winning economists signed a letter to this effect in June 2024. Higher inflation typically means higher home prices and higher mortgage rates, but — if the trend of elevated inflation persists — it can also mean that there won’t be a cheaper time to purchase a house in the near future.
How to get the best mortgage rates
1. Boost your credit score
Pay your bills on time, minimize your credit card balances and avoid opening several new credit accounts at once. You’ll get the best conventional mortgage rates with a 780 credit score or higher.
Learn more about ways to boost your credit score.
2. Compare rates from multiple lenders
LendingTree data consistently show that consumers who shop around for mortgage rates typically save money. Get a loan estimate from three to five different mortgage lenders and compare the rates and terms you’re offered.
Learn more about our picks for the best mortgage lenders.
3. Consider paying points
A mortgage point costs 1% of your loan amount, and paying for points allows you to “buy” a cheaper interest rate. Read the fine print if you see an online rate that looks lower than what other lenders are offering — there’s a good chance you’ll pay points to get it.
Ready to see competitive rate offers on LendingTree?Frequently asked questions
If you can afford a mortgage and find a home that suits your needs, now can be a good time to buy, despite high rates and a limited number of homes for sale.
Timing the market is extremely difficult, if not outright impossible. So if you’re waiting to make a choice based on what you hope will happen instead of what’s already going on, you could end up missing out on a lot of good opportunities — even in today’s expensive housing market.
“There’s no reason to think that the housing market is going to crash anytime soon,” Schulz says. Low unemployment and foreclosure rates, as well as a moderate housing inventory increase are all signs that the housing market is relatively healthy, he adds.
And, if you’re thinking a housing market crash could even bring some benefits — like lower home prices — he offers this reminder: “These things don’t happen in a vacuum. A housing market crash very well might be accompanied by a recession, for example. That would likely mean increased unemployment and greater overall economic uncertainty, leaving people even less able to afford to buy.”
A mortgage interest rate is the base rate you’re charged to borrow money, but a mortgage annual percentage rate (APR) is the total cost of taking out a mortgage (the interest rate plus closing costs and fees). Both numbers are expressed as a percentage. For more details, check out our guide to distinguishing an APR versus interest rate.
The Federal Reserve’s monetary policy indirectly impacts fixed-rate mortgages, which are often tied to the 10-year U.S. Treasury bond yield. The Fed’s policies have a direct effect on loans with variable interest rates, including ARMs, credit cards and home equity lines of credit (HELOCs).
Haggle for a lower interest rate by using your mortgage offers as leverage. Ask each lender about matching your lowest quoted rate. Consider making a larger down payment, select an ARM loan with a lower initial rate or ask your lender about your mortgage buydown options.
Discuss mortgage rate lock options with your loan officer once you’re under contract on a home and moving through the application process. Rate locks usually last between 30 and 60 days, but they can be longer. Watch your expiration date — you may face a rate lock extension fee if your loan doesn’t close before your rate lock expires.
Mortgage rates dropped to a historical low of 2.65% in January 2021, when the Federal Reserve cut the federal funds rate to 0% to stabilize the post-pandemic economy.