Mortgage Interest Rates Forecast

Mortgage rates dropped to their lowest average since September 2022 this week. The average 30-year fixed rate fell to 5.91% APR in the week ending Jan. 15, according to rates provided to NerdWallet by Zillow. The decline followed President Trump directing Fannie Mae and Freddie Mac to buy mortgage-backed securities. Still, the move raises some concerns, since similar strategies played a role in the 2008 financial crisis.

Home buyers may not feel immediate relief, since winter listings are scarce and inventory remains tight. Refinancers, on the other hand, are moving quickly: mortgage refinance applications surged as homeowners jumped at the chance to lock in lower rates. Crossing that psychological threshold of 6% rates is giving many borrowers a fresh sense of optimism — as long as the numbers still work for their budget.

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January mortgage rates forecast

Several Federal Reserve officials are scheduled to speak ahead of the Jan. 27–28 meeting, though much of that commentary may be overshadowed by questions around the Fed’s independence following recent Justice Department subpoenas involving Chair Jerome Powell. With mortgage rates likely to stay fairly steady, homeowners thinking about refinancing may still find opportunities, even without a big market shift.

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