Will Mortgage Rates Fall Below 6%? Here’s What Could Trigger Low Rates

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 6 March 2025

⏱️ 16 minutes

🔗️ Recording | iTunes | RSS

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Summary

Mortgage rates have hit a new low for 2025, hovering around 6.75%, down from their peak of 7.25%. This is serious interest rate relief for homebuyers, real estate investors, and anyone getting a mortgage. But will mortgage rates fall even further in 2025? A new article from HousingWire’s Logan Mohtashami suggests that even more rate relief could be on the way, but not without a series of caveats. To give our take, we’re bringing you a bonus episode where Dave breaks down Logan’s argument, gives his opinion on the hypotheses, and reveals what would have to happen for rates to drop into the low sixes, maybe even into the five percent range! With bond yields ticking down and recession fears mounting, mortgage rates seem poised to improve compared to the past couple of years. Will we have to see economic pain before rates lower? Could rates go back up, even higher than before, if positive economic news emerges? Dave is breaking down both his own predictions and Logan’s in this bonus episode. In This Episode We Cover: Today’s mortgage rates and why we’re hitting 2025 lows Two factors that influence mortgage rates and where they both stand now The bond yield “spread” and how its improvement could keep rates low What has to happen for rates to fall even more, and why it’s not all good news Could mortgage rates get BELOW six percent in 2025? And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Ask Your Question on the BiggerPockets Forums BiggerPockets YouTube Apply to Be a BiggerPockets Podcast Guest! Do mortgage rates have room to drop lower? Invest in Any Market Cycle with “Recession-Proof Real Estate Investing” Sign Up for the BiggerPocket Real Estate Newsletter Find Investor-Friendly Lenders Mortgage Rates Hit 2025 Low as Recession Fears Rise Read Logan’s Article, “Do mortgage rates have room to drop lower?” Connect with Dave (00:00) Intro (02:05) Why Mortgage Rates Are Falling (03:18) Will Mortgage Rates Fall Further? (05:49) What This Means for Investors (07:02) The Mortgage-Bond "Spread" (10:18) What Will Cause Lower Rates Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-bonus Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	The mortgage rate roller coaster has taken yet another turn over the last couple of weeks
0:05.0	with the average rate on a 30-year fixed, dropping from 7.25% down to 6.75% as of this recording.
0:12.9	And that's been great news, but it also has the whole real estate world wondering, will rates now go lower?
0:19.5	Or is this just a temporary reprieve before rates
0:23.1	just rise again? Today, we're digging in on the future of rates and I'll even give you my
0:28.5	advice on if now is a good time to lock in or if you're better off week.
0:41.8	Hey, everyone, it's Dave, head of real estate investing at Bigger Pockets.
0:46.7	And today we're coming to you with a quick bonus episode of the podcast.
0:49.3	Mortgages have been in the news a lot the last few weeks.
0:51.0	Well, really, the last few years.
0:54.4	But many, many of you have been reaching out to me over the last couple of days to ask about what this means for the future of rates. They've gone down a little bit,
0:59.0	but are they going to keep going down even lower? And over just this past weekend, I was reading
1:04.2	a great article from one of my personal favorite analysts, someone I've been following for years,
1:10.1	Logan Motishami, who works over at Housing
1:12.2	Wire, he wrote this article about whether there's room for rates to fall even further. And since
1:18.0	Logan is such a pro, he does his own economic forecasting, and he's basically just right a lot.
1:24.4	I figured I'd share the highlights of Logan's article with all of you, provide some
1:28.8	my own feedback and thoughts. But before we do that and jump into it, I need to provide a little
1:33.8	bit of context because Logan really gets into some important economic principles. And I just
1:39.5	want to give everyone a little bit of background about the two main drivers for mortgage rates. It's not the Fed.
1:46.0	You've probably heard me say that a lot. It's actually two different things. It's about the yield
1:50.5	on a U.S. Treasury and the quote unquote spread. Yields are basically the interest that an investor
	...

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