As we move into March 2025, many homebuyers are wondering where mortgage rates are headed. Will they dip? Will they rise? Or will they hold steady?
The short answer? Rates are likely to remain stable with minor fluctuations. But as always, the housing market comes with its fair share of twists and turns.
Let’s break it down.
Current Mortgage Rates: Where We Stand
At the close of February 2025, the average rate for a 30-year fixed mortgage landed at 6.87%, according to Freddie Mac. That’s a slight drop from the previous week’s 6.89%, making it the lowest we’ve seen this year.
While today’s rates are still higher than the historically low rates during the pandemic, any dip is welcome news for hopeful homebuyers navigating high home prices and limited inventory.
To put the market into perspective, the Federal Reserve Bank of St. Louis reported that the median sales price of a U.S. home was $419,200 at the end of 2024. With rising home costs and mortgage rates still above 6%, buyers are feeling the squeeze.
Expert Insights: Will Rates Drop This March?
The burning question: Are mortgage rates going to change in March 2025?
While we’d all love a crystal ball, predicting rate movements isn’t an exact science. But real estate experts do have their insights.
Bianca D'Alessio, founder and CEO of the Masters Division at Nest Seekers International, puts it simply:
“I think that everyone wants there to be some sort of crystal ball and this great news that [interest rates] are going to come down… but the reality is, we just don’t know. Rates are shifting week over week—ticking up slightly, then dropping back down.”
D'Alessio believes March will see stable mortgage rates, with only minor changes, but no major drops or spikes.
The Fed’s Role: Why Rates Aren’t Dropping (Yet)
One big factor in mortgage rates is the Federal Reserve and its stance on interest rates.
Over the past few years, the Fed aggressively raised rates to combat inflation. But in late 2024, they began making cuts, hoping to ease borrowing costs—including mortgage rates. Unfortunately, those cuts haven’t yet translated into significant relief for homebuyers.
Shmuel Shayowitz, president and chief lending officer at Approved Funding Corp, offers his take:
“March will likely close out the first quarter of 2025 without much movement. The next Fed meeting on March 18-19 isn’t expected to bring any new rate cuts.”
The Fed had originally projected four rate cuts for 2025, but that’s now been reduced to just two. Economic uncertainties, inflation concerns, and political shifts—like potential tariff talks under the Trump administration—are adding even more unpredictability.
Shayowitz explains:
“As the administration works to cut waste and expenses, that could help lower rates. But any new tariffs could push inflation higher, potentially keeping mortgage rates stuck where they are.”
Should You Buy a Home Right Now?
If you’re waiting for rates to drop before buying a home, you might be waiting a while. But that doesn’t mean you need to hit pause on your homeownership goals.
Bianca D'Alessio reminds buyers that it’s all about the monthly payment:
“Buying a home is one of the biggest financial decisions anyone will make. But in today’s market, it’s even more important to focus on how that monthly mortgage payment fits into your budget—not just today, but long term.”
While many buyers plan to refinance when rates eventually drop, it’s risky to bank on that happening soon.
Jason Lerner, branch manager at First Home Mortgage, advises caution:
“I believe rates will improve over time, but I’d never want someone to buy a home they can’t comfortably afford today just because they hope to refinance later.”
Maximizing Your Buying Power
So, if you’re ready to buy a home, what’s the best strategy?
Lerner suggests working with a local lender and realtor who understand your market inside and out:
“The most important step is partnering with experts who know the local market and can guide you through the process. Plus, there are great first-time homebuyer programs out there that can help.”
Bottom Line: March 2025 Mortgage Rate Outlook
Mortgage rates are expected to hold steady through March, hovering around 6.87%.
The Federal Reserve is unlikely to cut rates in March, but future reductions later in 2025 could bring relief.
Economic uncertainties—like inflation and political shifts—continue to impact rates.
If you’re planning to buy a home soon, focus on what you can control: your budget, financing options, and working with the right team.
At Best Option Mortgage, we’re here to help you navigate today’s market with confidence.
💡 Ready to explore your homebuying options? Contact Best Option Mortgage today for a personalized mortgage quote!