ROCHESTER, N.Y. – If you’re hoping to buy a house in 2025, you may be wishing for a crystal ball to predict interest rate changes. While we don’t have that, News10NBC’s Deanna Dewberry says the next best thing is talking to really good economic analysts.

“I have homebuyers, would-be homebuyers who’ve reached out who have said we’d really like to buy a house but interest rates are too high. I’m gonna hold out until the end of 2025. You say what to those folks?” Deanna asked Greg McBride, Chief Financial Analyst at Bankrate.

“For the would-be homebuyer, I just don’t think you can anchor to the 3, 4, or 5 percent mortgage rates. That’s just not the reality we’re in right now,” McBride responded.

He added, “And even if rates did drop, the risk you run there is that it could spur additional demand that then pushes home prices up. It doesn’t take much of an increase in home prices to offset the affordability benefit of a drop in mortgage rates.”

According to the chief financial analyst at Bankrate, the Fed will only bring interest rates down if they see hard evidence that inflation is coming down. While we’ve seen great progress since the days of 9% inflation toward the end of last year, falling inflation stalled at just under 3%, just above the Fed target of 2%. So, while interest rates will likely come down this year, Bankrate’s chief analyst predicts it will be very slow, maybe as few as three interest rate cuts this year.

McBride says he believes those 3% and 4% interest rates we saw for so long are likely a thing of the past. We saw the longest economic expansion in history but stagnant growth in household income, which caused the Fed to keep interest rates low. That is no longer the case.

His advice for homebuyers is to focus not on the Fed, but instead on paying down debt and improving your credit score. That’s key in improving your interest rate when it’s time to apply for that all-important mortgage loan.

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