The Trump presidency could have pushed mortgage rates higher or lower in 2025, depending on how policies affected inflation, economic growth, Treasury yields and expectations for Federal Reserve policy. The forecasts available at the time generally expected rates to stay above 6%, but they changed as economic conditions and market rates shifted. They were estimates—not guarantees, actual year-end results or quotes for individual borrowers.
How the 2025 mortgage-rate forecasts changed
Fannie Mae revised its outlook several times as new information arrived. The figures below are its dated forecasts for the end of each year, not a single forecast carried unchanged through 2025.
| Forecast date | End-2025 forecast | End-2026 forecast | What the forecast reflected |
|---|---|---|---|
| December 2024 | Around 6%; Fannie Mae expected rates to remain above 6% during 2025 and decline only slightly toward year-end. | Not stated in the December 2024 forecast cited here. | Fannie Mae had not incorporated explicit policy changes while awaiting details. |
| March 28, 2025 | 6.3% | 6.2% | Fannie Mae lowered both year-end forecasts by 0.3 percentage points from its previous outlook. |
| June 13, 2025 | 6.5% | 6.1% | Fannie Mae’s interest-rate forecasts used market rates through May 30, 2025. |
| September 12, 2025 | 6.4% | 5.9% | Fannie Mae’s interest-rate forecasts used market rates through August 29, 2025. |
These updates are revisions, not contradictions: each reflects a different publication date, market backdrop and set of assumptions. The December 2024 estimate was a broad expectation of rates above 6% during the year and around 6% at year-end; later figures were explicit year-end forecasts. None should be mistaken for a measured 2025 outcome. The cited forecasts do not establish a verified actual year-end 2025 rate.
An Associated Press report in December 2024 found that most of eight forecasts it reviewed expected the average 30-year mortgage rate to exceed 6% in 2025; some outlooks reached as high as 6.8%. That was a summary of forecasts, not a result or a promise that rates would land within a particular range.
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Why Trump-era policies could move mortgage rates either way
Mortgage rates reflect longer-term borrowing costs and investor expectations, not just the Federal Reserve’s overnight policy target. Policy can affect rates through a chain of changes in inflation expectations, economic growth, Treasury borrowing and yields, and expected Fed decisions. The direction depends on how policies are implemented and how markets respond.
Tariffs: higher inflation pressure or weaker growth
Tariffs can raise the prices of imported goods and lift inflation expectations. If investors expect persistent inflation, long-term yields and mortgage rates could rise; the Fed might also keep its policy rate higher for longer. But tariffs that substantially slow economic activity could instead lead markets to anticipate more Fed easing. A weaker outlook can also increase demand for safer investments such as Treasury securities, putting downward pressure on longer-term yields and potentially mortgage rates.
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In February 2025, Fannie Mae described both possibilities and emphasized uncertainty. It noted that long-term rates, including mortgage rates, fell in 2019 after tariff escalation, but cautioned that the effect was difficult to separate from changes in housing construction and the Fed’s rate cycle. That example does not establish that tariffs reliably lower rates.
Immigration, taxes, regulation and deficits
Changes to immigration, trade, fiscal and regulatory policy can affect both growth and inflation. Fannie Mae’s December 2024 outlook identified significant tariffs or a meaningful slowdown in immigration as risks that could weaken growth while increasing inflation pressure. It also said tax and regulatory changes could create upside or downside risks, depending on their details.
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Fiscal policy matters in part through government borrowing. Whether tariff proceeds reduce deficits, fund spending or support other tax cuts can change the expected supply of Treasury debt and the outlook for economic demand. Those changes may influence Treasury yields and, in turn, mortgage rates. The available forecasts do not isolate a specific effect of any one policy.
Federal Reserve decisions are important, but not a one-for-one rate pass-through
The Fed’s March 2025 Summary of Economic Projections showed median participant projections of 1.7% real GDP growth, 2.7% PCE inflation and a 3.9% federal funds rate at the end of 2025. These were individual participants’ projections based on their own assessments of appropriate monetary policy and other economic factors. They were neither a committee promise nor a mortgage-rate forecast.
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Mortgage rates can move before or without a change in the federal funds rate because investors respond to expected future inflation, growth, Fed policy and Treasury yields. So a Fed rate cut does not automatically produce an equal-sized mortgage-rate decline, and a hold does not guarantee mortgage rates will stay flat.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the forecasts do—and do not—tell a homebuyer
- They offer a dated baseline, not certainty. In December 2024, Fannie Mae expected rates to remain above 6% through much of 2025 and fall only modestly by year-end, before it had incorporated explicit policy changes.
- They do not establish presidential causation. The forecasts describe possible economic paths and market expectations; they do not provide a causal estimate showing that a particular Trump administration policy caused a specific mortgage-rate move.
- They are not personal loan offers. A borrower’s rate depends on the loan and borrower profile, and lenders set rates using personal factors such as credit as well as current market conditions. Compare the loan term and type, down payment, credit assumptions, points and fees, and whether the rate is locked.
- A survey benchmark is not a guaranteed rate. Freddie Mac’s Primary Mortgage Market Survey focuses on conventional, conforming, fully amortizing home-purchase loans for borrowers putting 20% down with excellent credit. It is useful for context, not a rate every borrower can obtain.
A later rate observation is not a 2025 forecast
For a separate, later point of reference, Freddie Mac reported a 30-year fixed-rate survey average of 7.28% on October 1, 2026, compared with 7.03% the prior week and 6.34% a year earlier. Those are dated survey observations, not a personal quote and not evidence by themselves that presidential policy caused a rate change. Freddie Mac Chief Economist Sam Khater said that day: “With mortgage rates on their current trajectory, the housing market continues to be supported by favorable economic conditions.”
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The rate outlook also shifted during 2025. In its March 28, 2025 forecast release, Fannie Mae Senior Vice President and Chief Economist Mark Palim said: “We expect the recent pullback in mortgage rates will provide a small boost to home sales this year.” In February 2025, Fannie Mae’s Economic and Strategic Research Group described its broader view: “In summary, we are holding to one of our major themes for the year. While we expect mortgage rates to remain comparatively elevated as a baseline, periods of heightened volatility should be expected.”
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