Interest Rate Forecast Looks Good

​As we move through 2025, prospective homebuyers and homeowners in Charleston, South Carolina, and across the U.S. are closely monitoring mortgage interest rates. After the volatility of recent years, the outlook for mortgage rates this year is cautiously optimistic, though several factors could influence their trajectory.



​Current Mortgage Rate Landscape

As of April 2025, the average 30-year fixed mortgage rate has remained under 7% for twelve consecutive weeks, indicating a downward trend compared to the highs of 2023. Freddie Mac reports that rates are hovering between 6.5% and 6.7%, influenced by stable 10-year Treasury yields. 

Forecast for the Remainder of 2025

Industry experts anticipate that mortgage rates will continue to decline gradually throughout 2025. Fannie Mae and the Mortgage Bankers Association project that 30-year fixed rates will average around 6.2% to 6.4% by the end of the year. Morgan Stanley suggests that rates could fall further if Treasury yields decrease and housing supply increases, though a return to pre-pandemic affordability levels is unlikely.

Factors Influencing Mortgage Rates

Several key factors will influence mortgage rates in 2025:

• Inflation Trends: Persistent inflation could prevent significant rate reductions, as lenders aim to maintain returns above inflation levels.

• Federal Reserve Policies: The Fed's decisions on interest rates will directly impact mortgage rates. While rate cuts could lower mortgage rates, the timing and magnitude of such cuts remain uncertain.​

• Global Economic Conditions: Economic policies, such as tariffs, can affect the broader economy and, by extension, mortgage rates. For instance, recent U.S. tariffs have introduced volatility that may influence future rate movements.

Implications for Homebuyers

For those considering purchasing a home in 2025, the gradual decline in mortgage rates offers a more favorable borrowing environment compared to the peaks of recent years. However, it's essential to remain vigilant, as economic uncertainties could alter this trajectory.​

In Charleston, where the housing market has been competitive, potential buyers should monitor local market trends and consult with financial advisors to make informed decisions. Locking in rates when they dip and exploring various mortgage options can provide financial advantages in this evolving landscape.​

In summary, while mortgage rates in 2025 are trending downward, they are influenced by a complex interplay of domestic and global economic factors. Staying informed and proactive will be key for anyone navigating the housing market this year.

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