Borrowers might experience some relief in 2025 as interest rates are predicted to decrease, although not significantly. Bankrate's 2025 forecast anticipates three interest rate cuts, bringing the benchmark rate down to a range of 3.5% to 3.75%. Despite this, rates are expected to remain at their highest point since 2008. The Federal Reserve's aggressive rate hikes in 2022 and 2023 to combat inflation have led to elevated rates, impacting areas like mortgages and credit cards.
Borrowers could see some relief this year, though interest rates aren't likely to fall substantially. Bankrate published a 2025 interest rate forecast“The reality of it is interest rates are going to be higher than what we had experienced for the better part of 15 years prior to 2022,” McBride said Friday.
But even with three more rate cuts, McBride expects the Fed’s key rate to hold at the highest point since 2008. The snapback was much more rapid following the pandemic recession, with the economy and consumers flush with stimulus. “I think it depends on your perspective,” McBride said. “If you're anchoring to the 3% and 4% rates that we had seen up until a few years ago, then yes, you are going to be disappointed. Because we're not going back to those levels.”
McBride predicts that the average home equity loan rate will fall about half a percentage point from its year-end level , and the average home equity lines of credit rate will fall 1.11 percentage points from its year-end level . is typically the highest-cost debt that households have. McBride said paying it down should be a priority.Rates will get a little bit better this year, he said.But McBride warned that, “That isn't going to make an unaffordable car affordable.”
INTEREST RATES FEDERAL RESERVE MORTGAGE RATES INFLATION BANKRATE
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