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Are Mortgage Rates About to Drop? Dave Ramsey Thinks So – Here’s What That Means for You

If you’ve been feeling the pressure of rising home prices and stubbornly high mortgage rates, you’re not alone. Whether you’re saving for your first home or considering a refinance, it’s been a tough market to navigate.

But according to well-known personal finance expert Dave Ramsey, change could be coming – and soon. Ramsey recently shared his belief that mortgage rates are likely to decline in the near future, which could help breathe new life into the sluggish housing market. So, what’s driving this forecast—and should you be paying attention?

Let’s break it down.

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Why Dave Ramsey’s Take Matters

If you’re not familiar with Dave Ramsey, here’s a quick recap. He’s a household name in the world of personal finance, known for his no-frills, practical advice on money management. Millions follow his radio show, read his best-selling books, or use his baby-step method to get out of debt and build wealth.

One of the reasons Ramsey has such a loyal audience is that he speaks from real-world experience . He’s faced financial disaster himself and rebuilt from the ground up. So, when he shares predictions about the housing market, people listen.

He’s long been a proponent of buying with cash or using a 15-year fixed mortgage, and his advice tends to lean on the conservative side. But his recent comments about falling interest rates show he’s optimistic that better conditions may be around the corner.

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What Ramsey Actually Said About Mortgage Rates

In a recent interview with TheStreet, Ramsey predicted that mortgage rates are likely to come down… potentially soon. While he didn’t put exact numbers on the table, he noted that even a modest dip of 1 – 2 percentage points could significantly increase buyer activity and potentially trigger what he called a “home buying frenzy.”

That’s a bold statement, especially considering how cautious many analysts are being about rate forecasts. But Ramsey’s logic is rooted in basic supply and demand: affordability has been a barrier, and lower rates could be the key to unlocking pent-up interest from would-be buyers.

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Where Mortgage Rates Stand Right Now (May 2025)

To give Ramsey’s prediction some context, here’s what the mortgage rate landscape looks like today:

• 30-year fixed mortgage: Around 6.96%

• 15-year fixed mortgage: Roughly 6%

• 30-year refinance: Around 6.91%

• Jumbo loans: Also hovering around 6.8%

While these rates are lower than the 7.79% peak we saw back in October 2023, they’re still a far cry from the ultra-low rates of the early 2020s. That gap has made many buyers hesitant, which is why a potential drop could have such an outsized impact.

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What Actually Affects Mortgage Rates?

Mortgage rates don’t move randomly—they’re influenced by a mix of economic indicators and market dynamics, including:

• Inflation: As inflation rises, lenders raise rates to protect their returns.

• Federal Reserve policy: While the Fed doesn’t set mortgage rates, its decisions on the federal funds rate can have a ripple effect.

• Economic growth: A hot economy often pushes rates higher, while a slowdown might bring them down.

• Bond market trends: Specifically, the yield on the 10-year Treasury note tends to track closely with mortgage rates.

• Global uncertainty: Geopolitical events, trade issues, and financial instability can all affect investor behavior and, in turn, rates.

Ramsey’s forecast likely takes all these moving parts into account. While he’s not an economist, his views often reflect broader market sentiment.

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How Do Other Experts View the Market?

Ramsey isn’t the only one anticipating some relief—though other predictions are a bit more reserved:

• The National Association of Home Builders sees rates dipping to around 6.6% by the end of 2025.

• Freddie Mac and the Mortgage Bankers Association expect gradual declines as well, projecting rates around the mid-6% range by late 2025.

• Analysts at U.S. News suggest we may not see rates drop below 6% until sometime in 2026, if at all.

Most agree: we’re not going back to the sub-3% era any time soon, but a moderate drop could still offer real benefits to buyers and homeowners alike.

Related: Why Foreigners Are Buying Investment Properties in the Northeast Midwest and South

What a Drop in Rates Could Mean for You

Even a small shift in mortgage rates can have a big impact on affordability and borrowing power. Here’s how:

✅ Lower Payments: A reduction from 6.8% to 6% on a $300,000 mortgage could cut your monthly payment by around $150 and save you over $50,000 in interest across 30 years.

✅ More Buying Power: If your monthly budget stays the same, lower rates let you afford a more expensive home—or buy in a better location.

✅ Refinancing Opportunities: If you bought or refinanced at a higher rate, a drop could make it worthwhile to renegotiate your loan, especially if you can shorten your term or significantly lower your payment.

✅ Rising Demand: Ramsey predicts lower rates will push more buyers back into the market. That could increase competition and potentially push prices up again.

Of course, affordability remains a concern—especially for first-time buyers. Home prices are still high, and inventory is tight. So while lower rates help, they’re not a silver bullet.

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Ramsey’s Advice: Don’t Try to Time the Market

Even with his optimistic forecast, Ramsey doesn’t recommend waiting around and trying to predict the exact moment rates will fall. Instead, his message is clear: buy a home when you’re financially ready.

For him, that means:

• Being free of consumer debt

• Having 3 to 6 months of expenses saved

• Keeping your monthly mortgage (including taxes and insurance) under 25% of your take-home pay

• Choosing a 15-year fixed-rate mortgage, which he believes is a smarter long-term choice than the more popular 30-year loan

For those thinking about refinancing, Ramsey also warns not to be swayed by a slightly lower rate unless the math works in your favor—taking into account closing costs and your overall financial goals.

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Final Thoughts

While no one can say for certain where mortgage rates are headed, Dave Ramsey’s prediction offers a hopeful outlook—especially if you’ve been sidelined by affordability concerns. If rates do fall, we could see a more active market, more refinancing, and better opportunities for buyers.

Still, the best advice might be the simplest: focus on your own financial readiness. Because in any market, that’s the smartest move you can make.

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