Where mortgage costs trend from here will depend in part on unemployment and inflation data, which will, in term, inform interest rate decisions from the Fed. It seems likely that mortgage costs will remain relatively high compared to recent history for 2025.

Most economists were expecting mortgage rates to fall over the course of the coming year. But rates have risen steadily over the last month, inching back up to 7% — and they’re expected to move even higher in the coming weeks.

Interest rates on mortgages are on the rise, with the benchmark 30-year fixed mortgage rate increasing to 6.93 percent last week. Mortgage rates have remained above 6 percent since 2022, making it more expensive to finance a home and aggravating housing market woes.

As we step into the new year, with the presidential inauguration on the horizon, many are wondering about the direction of interest rates.