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A mix of high home prices, low inventory and steep mortgage rates has caused homebuying activity to drop. At the end of 2024, the median sales price for houses sold in the U.S. was $419,200, according to data from the Federal Reserve Bank of St. Louis. Average mortgage interest rates for a 30-year term were 6.87% as of February 13, 2025, based on data from Freddie Mac.
This represents a slight drop from 6.89% from the week prior and is the lowest mortgage interest rate so far in 2025. While mortgage rates are relatively high compared to the notably lower rates during the pandemic, the decrease is welcome for home-buying hopefuls.
But the latest January inflation data from the Bureau of Labor Statistics came in higher than expected at 3% on an annual basis. Inflation and looming economic uncertainties threaten to curtail downward progress. If you’re planning on buying a home, understanding where mortgage rates might land in March can help you in the process. We spoke to real estate experts about the mortgage interest rate forecast for March 2025.
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What’s the mortgage rate forecast for March 2025?
Eager homebuyers want to know what will happen to mortgage rates, but what happens next will always have some level of unpredictability.
“I think that everyone wants there to be some sort of crystal ball and this great news that they’re [interest rates] going to come down and buyers are going to come back into the market and everyone’s going to be able to start affording things again,” says Bianca D’Alessio, founder and CEO of the Masters Division at Nest Seekers International, a real estate brokerage.
For some perspective, at the start of January 2025, 30-year term fixed mortgage rates stood at 6.91%, going up to 7.04% mid-January, and down to 6.95% by the end of the month, according to Freddie Mac data.
“The reality is we just don’t know. We’re really feeling things shift week over week. You know, rates tick up ever so slightly, and then they drop back down a little bit. And we’re feeling that real-time activity in the market. I think that rates are going to stay pretty stable throughout March,” says D’Alessio.
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Are mortgage rates likely to stay the same in March 2025?
As inflation spiked several years ago, the Federal Reserve increased the federal funds rate, which has a broader impact on the economy and the cost of borrowing. By the end of 2024, the Federal Reserve made several cuts, which had the potential to positively impact mortgage rates.
However, there are a number of factors that influence mortgage rates. In a disappointing turn of events, mortgage rates didn’t budge much despite the cuts. Now further cuts by the Fed in March seem unlikely.
“Unfortunately, March will close out the first quarter of 2025 with no good news for aspiring home buyers. The next Fed meeting is March 18-19 and there is almost no possibility that there will be any move by the Fed to cut interest rates,” says Shmuel Shayowitz, president and chief lending officer at Approved Funding Corp.
The Federal Open Market Committee (FOMC) had previously projected four rate cuts for 2025. Now that projection has been updated to only two. Shayowitz suggests that aside from the Fed, the Trump administration could impact rates.
“As the administration moves to cut waste and expenses from their balance sheet, that might be a favorable trigger to help lower rates. The flip side, which is certainly giving the market pause, is the tariff talks by President Trump, which might have more inflationary pressures and not help rates,” says Shayowitz.
So for March 2025, there may not be a mortgage interest rate rise or drop. Instead, mortgage rates are likely to stay roughly the same. The Fannie Mae Economic and Strategic Research (ESR) Group has a mortgage rate forecast of 6.5% for the end of 2025.
Is now a good time to buy a home?
Homebuyers anticipating a mortgage interest rate drop might have to keep on waiting. But that doesn’t mean you necessarily have to put your dream of homeownership on hold.
The most important thing to consider is how your monthly mortgage payment will affect you now and in the future.
“Buying a home is one of the biggest financial decisions any person or any family will make in their lifetime. But I think it’s a lot more evident in today’s market of when you’re pushing that affordability on that monthly payment basis, how does that impact the rest of your life?” says D’Alessio.
It’s important to avoid rushing into homeownership, hoping to refinance at a lower rate later. While refinancing can be a solid strategy down the line when it makes sense, don’t make your decision now based on that.
“I think there’s going to come a time where rates improve and payments are much lower, but I would never want someone to enter into something that didn’t meet their budget based on today’s current snapshot in time,” says Jason Lerner, branch manager at First Home Mortgage.
The bottom line
The mortgage interest rate forecast for March 2025 has the potential for a slight drop but will likely hold steady, according to the experts we spoke with. For those ready to move forward regardless of mortgage interest rates ups and downs, Lerner recommends looking into first-time home buying programs and working with the right team to help you buy a home.
“I’d say probably the most important step of this whole process is to really find a local lender and a local realtor. Someone who’s incredibly knowledgeable about the overall industry and trends, but also has intimate knowledge about the local market and can really be an ally and resource,” says Lerner.