Will Interest Rates Go Down in May? | Predictions 2025

Mortgage rate forecast for next week (May 12-16)

After creeping down the past two weeks, mortgage rates stayed flat.

The average 30-year fixed rate mortgage (FRM) held at to 6.76% on May 8 from May 1, according to Freddie Mac. It marks 16 straight weeks below 7% for the average 30-year FRM.

“At this time last year, the 30-year fixed-rate mortgage was 30 basis points higher and purchase applications were declining,” said Sam Khater, Freddie Mac’s Chief Economist. “Today, rates are lower and have remained stable for weeks, sparking continued increases in purchase applications.”

In this article (Skip to...)

• Will rates go down in May?
• 90-day forecast
• Expert rate predictions
• Mortgage rate trends
• Rates by loan type
• Mortgage strategies for May
• Mortgage rates FAQ

Will mortgage rates go down in May?

"The recent movement in mortgage rates reflect broader economic uncertainty, which has left many households concerned about job security and financial stability."

-Hannah Jones, senior economic research analyst at Realtor.com

Mortgage rates fluctuated significantly in 2023, with the average 30-year fixed rate going as low as 6.09% and as high as 7.79%, according to Freddie Mac. That range narrowed in 2024, with a spread of 6.08% to 7.22%.

With the economy probably heading into a recession, we may have already seen the peak of this rate cycle. But if inflation rises, mortgage rates could uptrend. Of course, interest rates are driven by many factors and notoriously volatile, so they could change direction any given week.

Experts from Realtor.com, First American, and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in May.

Expert mortgage rate predictions for May

Molly Boesel, principal economist at Cotality

Prediction: Rates will decrease

“Mortgage rates should fall throughout the year, but how much they decrease will depend on the inflation and employment numbers. The Federal Reserve could lower them if employment numbers weaken, but high inflation will keep the Fed from acting. Any decreases in mortgage rates will most likely be small in the short term.”

Ralph DiBugnara, founder at Home Qualified

Prediction: Rates will decrease

"There has been much anticipation of lower mortgage rates, but we have yet to see any consistency of that happening. The stock market has been down, along with inflation and consumer spending. In most markets, these factors would signal downward mortgage rates. But currently there is lack of confidence in the Fed lowering and or changing their current stance. The results have been a higher 10-Year Treasury which, in turn, influenced higher mortgage rates. In May I believe we will see some slow movement lower, as some positive economic data this month could push the average 30-year fixed mortgage rates down to 6.75% and 6.375% for the 15-year fixed. Also, ARM loans have emerged again as options with lower rates that should be considered. The 7/1 Arm should land about 5.875%."

Hannah Jones, senior economic research analyst at Realtor.com

Prediction: Rates will decrease

"Mortgage rates surged in April following the announcement of widespread tariffs early in the month. While rates remained elevated for much of the month, they began to decline toward the end, hinting at a potential return to pre-announcement levels. Looking ahead to May, rates are expected to ease further as markets find more stability. However, upcoming economic data—particularly the jobs report and inflation data—could spark renewed volatility if results deviate from expectations. The recent movement in mortgage rates reflect broader economic uncertainty, which has left many households concerned about job security and financial stability. A sustained, downward trend in rates could help rebuild consumer confidence and encourage more buyers to re-enter the housing market."

Victor Kuznetsov, co-founder and managing director at Imperial Fund Asset Management

Prediction: Rates will moderate

​"The best-case scenario for mortgage rates is to hover just above the 6% mark for the next two years. The average American household has adopted a wait-and-see strategy regarding mortgage rates — as they also seek to reduce their monthly consumer spending — amid current economic uncertainty. The good news is that employment and home prices remain strong, so families will be in a better position to buy or refinance a home in the coming months, especially if rates dip below 6%."

Ryan Marshall, CEO at Voxtur

Prediction: Rates will moderate

“Due to inflation still running higher than expected, mortgage rates are likely to remain flat through the summer housing market. Furthermore, with continued uncertainty surrounding tariffs and their impact on the global economy, the bond market is facing increased volatility, which is having a destabilizing effect on mortgage investments in the secondary market. Heading into the Fall, if inflation cools as expected, mortgage rates will begin to dip slowly and steadily, finishing out 2025 around 6%.”

Sam Williamson, senior economist at First American

Prediction: Rates will moderate

“Mortgage rates are expected to remain in the mid-to-upper 6% range in May, amid ongoing worries over tariff-induced inflation and a softening in both business and consumer sentiment. Most market watchers anticipate that the Federal Reserve will hold rates steady at May’s Federal Open Market Committee meeting. Although the Fed does not set mortgage rates directly, its policy decisions affect borrowing costs indirectly through their impact on bond yields.

"Significant attention will be focused on Fed Chairman Jerome Powell’s remarks during the FOMC press conference. Any comments made by the Chairman signaling a potential shift from the Fed’s current “wait-and-see” approach could sway bond yields: a more hawkish tone regarding inflation risks is likely to push rates higher, while dovish comments emphasizing employment concerns might ease them. Moreover, despite a seemingly resilient labor market amid ongoing federal restructuring efforts and slowed hiring amid policy uncertainty, any hint of weakness in the upcoming jobs report could increase recession fears—likely leading to lower bond yields and, in turn, reduced mortgage rates.”

Diane Yu, CEO and co-founder at TidalWave

Prediction: Rates will moderate

"Mortgage rates, whether they linger between 6.4% and 6.6% or shift in May 2025, are merely one factor in a complex equation. Inflation, Federal Reserve actions, and global uncertainties undeniably influence rates, but true opportunity for homebuyers hinges on market dynamics, personal financial stability, and timing. Affordability isn’t dictated solely by rate fluctuations-it’s shaped by income growth, escalating home prices, and individual debt capacity. For households planning their next move, this means looking beyond rate forecasts and building resilience to market volatility."

Mortgage interest rates forecast next 90 days

As inflation ran rampant in 2022, the Federal Reserve took action to bring it down and that led to the average 30-year fixed-rate mortgage spiking in 2023.

With inflation gradually cooling, the Fed made three rate cuts in 2024 (September, November, and December). Heading into 2025, many experts believed mortgage interest rates would gradually descend.

Of course, rates could rise on any given week or if another global event causes widespread uncertainty in the economy.

Mortgage rate predictions for 2025

The 30-year fixed-rate mortgage averaged 6.76% as of May 8, according to Freddie Mac. Four of the five major housing authorities we looked at predict 2025's second quarter average to below that.

Wells Fargo sits at the low end of the group, projecting the average 30-year fixed interest rate to settle at 6.35% for Q2. Meanwhile, the Mortgage Bankers Association had the highest forecast of 7%.

Current mortgage interest rate trends 

Mortgage rates held steady after coming down for two weeks in a row.

The average 30-year fixed rate stayed at 6.76% on May 8 from May 1. Meanwhile, the average 15-year fixed mortgage rate declined to 5.89% from 5.92%.

Source: Freddie Mac

After hitting record-low territory in 2020 and 2021, mortgage rates climbed to a 23-year high in 2023 before descending somewhat in 2024. Many experts and industry authorities believe they will follow a downward trajectory into 2025. Whatever happens, interest rates are still below historical averages.

Dating back to April 1971, the fixed 30-year interest rate averaged around 7.8%, according to Freddie Mac. So if you haven’t locked a rate yet, don’t lose too much sleep over it. You can still get a good deal, historically speaking — especially if you’re a borrower with strong credit.

Just make sure you shop around to find the best lender and lowest rate for your unique situation.

Mortgage rate trends by loan type 

Many mortgage shoppers don’t realize there are different types of rates in today’s mortgage market. But this knowledge can help home buyers and refinancing households find the best value for their situation.

Which mortgage loan is best?

The best mortgage for you depends on your financial situation and your goals.

For instance, if you want to buy a high-priced home and you have great credit, a jumbo loan is your best bet. Jumbo mortgages allow loan amounts above conforming loan limits, which max out at $ in most parts of the U.S.

On the other hand, if you’re a veteran or service member, a VA loan is almost always the right choice. VA loans are backed by the U.S. Department of Veterans Affairs. They provide ultra-low rates and never charge private mortgage insurance (PMI). But you need an eligible service history to qualify.

Conforming loans and FHA loans (those backed by the Federal Housing Administration) are great low-down-payment options.

Conforming loans allow as little as 3% down with FICO scores starting at 620. FHA loans are even more lenient about credit; home buyers can often qualify with a score of 580 or higher, and a less-than-perfect credit history might not disqualify you.

Finally, consider a USDA loan if you want to buy or refinance real estate in a rural area. USDA loans have below-market rates — similar to VA — and reduced mortgage insurance costs. The catch? You need to live in a ‘rural’ area and have moderate or low income to be USDA-eligible.

Mortgage rate strategies for May 2025

Mortgage rates displayed their famous volatility throughout 2024. Fed cuts in September, November, and December, with the potential for more in 2025 provide optimism for descending rates.

Previously, the central bank held off on a rate hike at eight consecutive meetings, preferring to see if the economy would keep cooling organically. They finally deemed inflation's downtrend as organic and made its first cuts since 2020.

However, the Trump Administration's upward wealth consolidation and ongoing inflation battles forced the Fed to hold in January, March and May. As always, the committee said it would adjust its policies as necessary — which could mean additional cuts or possibly none at all.

Here are just a few strategies to keep in mind if you’re mortgage shopping in the coming months.

Be ready to move quickly

Indecision can lead to failure or missed opportunities. That holds true in home buying as well.

Although the housing market is becoming more balanced than the recent past, it still favors sellers. Prospective borrowers should take the lessons learned from the last few years and apply them now even though conditions are less extreme.

"Taking too long to decide to make an offer can lead to paying more for the home at best and at worst to losing out on it entirely. Buyers should get pre-approved (not pre-qualified) for their mortgage, so that the seller has some certainty about the deal closing. And be ready to close quickly — a long escrow period will put you at a disadvantage.

And it's definitely not a bad idea to work with a real estate agent who has access to "coming soon" properties, which can give a buyer a little bit of a head start competing for the limited number of homes available," said Rick Sharga.

If mortgage rates continue on a downward trajectory, more and more buyers will likely enter the market after being priced out on the sidelines. Being decisive (and prepared) should only play to your advantage.

Shopping around isn't only for the holidays

Since interest rates can vary drastically from day to day and from lender to lender, failing to shop around likely leads to money lost. 

Lenders charge different rates for different levels of credit scores. And while there are ways to negotiate a lower mortgage rate, the easiest is to get multiple quotes from multiple lenders and leverage them against each other. 

“For potential home buyers, it’s important to get quotes from multiple lenders for a mortgage, as rates can vary dramatically, especially during such a volatile period," said Odeta Kushi.

As the mortgage market slows due to lessened demand, lenders will be more eager for business. While missing out on the rock-bottom rates of 2020 and 2021 may sting, there’s always a way to use the market to your advantage.

How to shop for interest rates

Rate shopping doesn’t just mean looking at the lowest rates advertised online because those aren’t available to everyone. Typically, those are offered to borrowers with great credit who can put a down payment of 20% or more.

The rate lenders actually offer depends on:

• Your credit score and credit history
• Your personal finances
• Your down payment (if buying a home)
• Your home equity (if refinancing)
• Your loan-to-value ratio (LTV)
• Your debt-to-income ratio (DTI)

To figure out what rate a lender can offer you based on those factors, you have to fill out a loan application. Lenders will check your credit and verify your income and debts, then give you a ‘real’ rate quote based on your financial situation.

You should get three to five of these quotes at a minimum, then compare them to find the best offer. Look for the lowest rate, but also pay attention to your annual percentage rate (APR), estimated closing costs, and ‘discount points’ — extra fees charged upfront to lower your rate.

This might sound like a lot of work. But you can shop for mortgage rates in under a day if you put your mind to it. And shaving just a few basis points off your rate can save you thousands.

Mortgage interest rate FAQ 

What are today’s mortgage rates?

Mortgage rates are rising, but borrowers can almost always find a better deal by shopping around. Connect with a mortgage lender to find out exactly what rate you qualify for.

¹Today's mortgage rates are based on a daily survey of select lending partners of The Mortgage Reports. Interest rates shown here assume a credit score of 740. See our full loan assumptions here.

Selected sources:

• https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
• http://www.freddiemac.com/research/datasets/refinance-stats/index.page