Mortgage Interest Rates & DFW Housing Market Outlook!

As of May 2025, mortgage interest rates remain elevated, with the average 30-year fixed-rate mortgage hovering around 6.86%. Experts anticipate a gradual decline in rates through the remainder of the year, influenced by various economic factors and policy decisions.

Mortgage Interest Rates Current and Forecasted for 2025

Here is a comparison chart of current and forecasted 30-year fixed mortgage interest rates for 2025, based on data from key industry sources as of May 2025:

Source	Current Rate (May 2025)	Forecasted Rate (End of 2025)	Notes
Fannie Mae	6.86%	6.2%	Slight downward revision from earlier forecasts.
Forbes	6.86%	6.4%	Anticipates rates returning to a more "normal" range.
National Association of Realtors (NAR)	6.86%	6.4%	Predicts rates hovering near 6% in 2025.
Mortgage Bankers Association (MBA)	6.86%	5.9%	Expects rates to end 2025 at 5.9%.
Wells Fargo	7.00%	5.9%	A mild decrease from current levels, though still above the pre-pandemic range.
Redfin	6.86%	6.8%	Projects rates to remain in the high-6% range throughout 2025.
Freddie Mac	6.86%	Not specified	Expect rates to decrease gradually.

Current Rates:  As of May 2025, the average 30-year fixed mortgage rate is approximately 6.86%, according to Freddie Mac.

Forecasted Rates:  Most organizations forecast a gradual decline in mortgage rates by the end of 2025, with estimates ranging from 5.9% (MBA & Wells Fargo) to 6.8% (Redfin).

Please note that these forecasts are subject to change based on economic conditions, Federal Reserve policies, and other market factors.

Factors Influencing Mortgage Rates

Federal Reserve Policies

The Federal Reserve has maintained the federal funds rate between 4.25% and 4.50% in recent meetings. While the Fed's rate decisions don't directly set mortgage rates, they influence broader economic conditions that affect them.

Inflation Trends

Persistent inflation has kept mortgage rates elevated. However, as inflation shows signs of cooling, there's potential for rates to decrease. The Mortgage Bankers Association notes that "the hard data on inflation and unemployment will continue to drive interest rates."

Economic Growth and Treasury Yields

Morgan Stanley analysts suggest that a slowing U.S. GDP could lead to lower Treasury yields, subsequently reducing mortgage rates. Fannie Mae projects a modest GDP growth of 1.7% for 2025.

Federal Deficit and Fiscal Policy

The U.S. federal deficit, which reached $1.8 trillion in fiscal year 2024, may impact mortgage rates. Increased government borrowing can drive up Treasury yields, leading to higher interest rates on consumer loans, including mortgages.

Dallas-Fort Worth Housing Market Outlook

The Dallas-Fort Worth (DFW) real estate market is experiencing notable shifts in 2025.

Inventory and Pricing Trends

Inventory levels are rising, providing buyers with more options and potentially easing upward pressure on prices. While some areas have seen price adjustments, DFW remains a fundamentally strong market with long-term growth potential.

New Construction Surge

New construction home sales have surged, reaching the highest levels since 2021. This increase in supply offers buyers more choices and may contribute to price stabilization.

Affordability Challenges

Despite these positive developments, affordability remains a concern. High mortgage rates have tempered housing demand, and some buyers are delaying purchases or considering renting.

Conclusion

While mortgage rates are expected to decline gradually through 2025, they will likely remain above pre-pandemic levels. Economic indicators, Federal Reserve policies, and fiscal decisions will play pivotal roles in shaping the trajectory of mortgage rates.

For the Dallas-Fort Worth market, rising inventory and new construction provide opportunities for buyers, but affordability challenges persist. Prospective homeowners should stay informed and consider multiple scenarios, including the possibility of refinancing if rates fall.

If you are interested in more specifics as it relates to an area of interest or a neighborhood of interest for purchase or sale, contact us.  If you would like to discuss a purchase or sale and how we could help you maximize your return-on-investment, contact us.  We would be honored to assist you!

Here are further insights into the Texas Housing Market and Home Prices.

Note: The above information is based on expert forecasts and current economic data. Actual mortgage rates may vary based on market conditions and individual financial profiles.