T
he 30-year fixed mortgage rate has averaged around 7% this week, according to Freddie Mac, but some economists are already revising their forecasts for next year upward. Despite the slight drop in rates from last week's average of 7.04%, it's unlikely they will fall significantly in the coming weeks.

    Economic uncertainty surrounding President Trump's proposed tariffs on China, Canada, and Mexico could impact where rates go next. The real estate market remains sluggish during its seasonal winter lull, with fewer new listings and homes staying on the market longer.

    Mortgage rates eased for the first time since mid-December, falling slightly below 7%. According to Freddie Mac's latest survey, the average 30-year fixed-rate mortgage came in at 6.96%, down from last week's average of 7.04%. The 15-year rate also dropped from 6.27% to 6.16%.

    With bond yields still elevated, there's no indication that rates will decline significantly anytime soon, said Lisa Sturtevant, chief economist at Bright MLS. "We should expect mortgage rates to be in the mid- to high-6% range in the weeks and even months ahead," she noted.

    Economists are closely watching administrative decisions that could impact rates and the economy as a whole. President Trump's proposed tariffs on China, Canada, and Mexico starting February 1 could lead to inflation, prompting the Federal Reserve to adjust its monetary policy and potentially affecting mortgage rates.

    Fannie Mae has revised its forecast for next year, now projecting that rates will end at 6.5%, up from its previous forecast of 6.2%. Sturtevant expects more adjustments to follow: "Nearly all forecasts suggest the average rate on a 30-year fixed-rate mortgage will stay above 6%, and it's very likely these forecasts will be revised upward in the first quarter of 2025."

    The real estate market is experiencing its typical mid-winter slowdown, with mortgage application activity relatively flat last week. Homes are taking longer to sell, spending a median of 52 days on the market – the longest span in two years – according to Redfin's weekly report. New listings are down 2.9% compared to a year ago, but overall inventory continues to slowly build.