Here’s what all the experts are saying about mortgage rates heading into winter: they’re probably going down.

Slowly. Maybe. If nothing weird happens.

Yeah, I know. Super helpful, right?

But honestly? That “gradual decline” thing everyone keeps talking about is actually important to understand. Because it means something very different than what most people are hoping for.

What “Gradual Decline” Actually Means

When experts say rates will “gradually decline,” they’re not talking about rates dropping from 6.2% to 4.5% by spring.

They’re talking about rates maybe hitting 6.1% by December. Maybe 5.9% by next fall if everything goes right.

Fannie Mae’s latest forecast has rates starting 2025 at 6.2% in Q1, then slowly dropping to 5.9% by Q4 2025. That’s a 0.3% decline over an entire year.

The Mortgage Bankers Association is even less optimistic – they’re predicting rates stay at 6.5% through the end of this year, maybe settling at 6.4% by late 2025.

So when you hear “gradual decline,” think inches, not feet.

Why Everyone’s Suddenly More Optimistic

Rates hit 6.17% a couple weeks ago. That’s the lowest they’ve been in over a year.

Then they bounced back to 6.22%. But still, we’re talking about rates in the low 6% range, which is way better than the 7%+ we saw earlier this year.

Three things are driving this:

Inflation’s cooling off. Not fast, but it’s moving in the right direction. It’s at 3% now, and the Fed wants it at 2%. As inflation keeps dropping, rates should follow.

The Fed’s cutting rates. They dropped the fed funds rate to 3.75%-4% in October. They’ve got another meeting in December. More cuts could be coming.

The 10-year Treasury is dropping. It’s sitting around 4% right now. Mortgage rates follow Treasury yields pretty closely. If the 10-year drops below 4%, we could see mortgage rates dip below 6%.

But Here’s The Catch

Just because the Fed cuts rates doesn’t mean mortgage rates automatically drop.

We saw this exact thing happen in September. Fed cut rates. Everyone got excited. And mortgage rates? They went up.

Why? Because mortgage rates follow the 10-year Treasury, not the Fed funds rate. And the Treasury market was reacting to other stuff – inflation concerns, government shutdown, general economic uncertainty.

So yeah, the Fed can cut all they want. But if Treasury yields stay elevated, mortgage rates aren’t moving much.

What The Smart People Are Actually Saying

I’ve been reading through all these forecasts, and here’s what the different groups are predicting for winter and into 2025:

Fannie Mae: 6.2% now, dropping to 5.9% by end of 2025

MBA: 6.4% through Q4 2025, maybe 6.3% by end of 2027

Wells Fargo: 6.3% for Q4 2025

Realtor.com: 6.7% average for 2025, falling to 6.4% by year-end

Zonda: Rates averaging between 5.9% and 6.2% in 2025

Notice the pattern? Nobody’s calling for rates below 5.5%. And most people think we’ll stay in the 6% range for quite a while.

Lisa Sturtevant, chief economist with Bright MLS, put it bluntly: “I expect mortgage rates will fall further in 2025 but will stay above 6%. We are in a new era where a 6% rate on a 30-year fixed rate mortgage is going to be the norm.”

What Could Change Everything

There are basically two scenarios where rates drop faster than expected:

Scenario 1: Inflation crashes. If inflation suddenly falls way below expectations, the Fed could cut rates more aggressively. Treasury yields would drop. Mortgage rates would follow.

Scenario 2: The economy weakens significantly. Jeff DerGurahian says “We may see rates ease toward the low-6% range by the end of the year if data shows signs of slower growth, weaker employment, and subdued inflation.”

But here’s the thing – if the economy tanks, yeah rates might drop. But then you’re dealing with job losses, recession fears, and a housing market that’s probably not doing great either.

Be careful what you wish for.

Why Buyers Are Still Waiting

Nearly three-quarters of real estate agents said most of their buyers think rates will come down further. That’s why people are sitting on the sidelines.

One agent in Pittsburgh said: “My biggest challenge is when buyers hear predictions of future rate decreases, which in turn have buyers sit on the sidelines and wait to see how low they will go instead of getting out there and buying now.”

And I get it. Nobody wants to buy at 6.2% and then watch rates drop to 5.5% six months later.

But here’s what people aren’t thinking about: home prices.

While you’re waiting for rates to drop 0.5%, home prices might go up 5%. Or 10%. Now you’ve saved a little on interest but you’re paying way more for the house itself.

The Historical Reality Check

Everyone keeps comparing today’s rates to the 2-3% rates from 2020-2021.

Stop doing that. Those rates were a once-in-a-lifetime thing caused by a global pandemic and massive government intervention.

Looking at long-term forecasts, nobody’s predicting 3% mortgage rates in the next five years. It took something as catastrophic as COVID to push rates that low. Short of another global crisis, we’re not going back there.

In the 1990s, 7% was normal. In 1981, rates hit 18%. So 6%? That’s actually not crazy high by historical standards.

What You Should Actually Do

If you’re buying, stop trying to time the perfect moment.

Rates are in the low 6% range. That’s the best they’ve been in over a year. Yeah, they might drop to 5.9% by next fall. But they also might bounce back to 6.5% next month.

Steven Glick from HomeAbroad says it well: “Rates are at a 2025 low, and waiting risks a rebound on hot data.”

One inflation report comes in higher than expected? Rates jump. One jobs report shows the economy’s stronger than people thought? Rates jump.

You can’t predict this stuff. Nobody can.

If You’re Refinancing

Jeff Taylor from the Mortgage Bankers Association says you should be “in touch with your lender on a weekly basis because rate markets have had big swings lately.”

If you’ve got a rate above 7%, you should absolutely be looking at refinancing right now. Even if rates tick up a bit by the time you close, you’re still saving money.

The refinance boom is already happening. Applications are up 151% from a year ago. Smart money is moving.

The Winter Forecast

Here’s my take based on everything I’m seeing:

Rates will probably stay in the 6.1% to 6.3% range through the end of the year. Maybe dip to 5.9% by next fall if the Fed keeps cutting and inflation keeps cooling.

But that’s assuming nothing crazy happens. No big inflation spike. No major economic surprise. No geopolitical crisis.

A lot can change. And usually does.

We’ve talked before about how Fed rate cuts actually work – the connection to mortgage rates isn’t as direct as people think.

Stop Chasing The Perfect Rate

The people who do well in real estate aren’t the ones who time the market perfectly.

They’re the ones who buy when the numbers work for their life. They build equity. They refinance if rates drop significantly. But they don’t sit around waiting for some magical, perfect moment.

The experts are predicting a “gradual decline.” That means slow. That means small movements. That means you could be waiting a long time for rates to hit your target number.

And while you’re waiting, life’s happening. Home prices are moving. Your rent’s going up. Your family situation’s changing.

Don’t let trying to save 0.3% on your rate cost you the house you actually want.

Not sure if waiting makes sense for your timeline? Contact Mortgage Maestro and let’s talk numbers. We’ll look at what rates would need to drop to for the wait to actually be worth it – most people are surprised when they see the math.