At the start of 2024, the path tolower mortgage ratesseemed relatively clear-cut: Official inflation would go down, theFederal Reservewould carry out more interest rate cuts and the cost of borrowing would gradually ease in 2025.That was then.Now, housing market experts aren't so certain. "Mortgage rates are not going to come down as much as we had expected, and affordability will still be a challenge," said Lisa Sturtevant, chief economist at real estate agency Bright MLS.Elevated mortgage rates aren't the only reason why homeownership has become largely inaccessible. As mortgage rates soared in 2022, home prices hit record highs and an inventory shortage persisted.Though mortgage rates have fallen from 2023 peaks, the decline has been slow and gradual. Over the past 12 months, the average 30-year fixed mortgage rate has fluctuated between 6.5% and 7.5%. Most housing economists had expected mortgage rates to drop to 6% by the end of 2024, moving into the mid-5% range in 2025. But mortgage rates recently jumped back up toward 7%.Now, forecasts show average 30-year fixed mortgage rates hovering around the mid-6% range for a while. Logan Mohtahsami, lead analyst at HousingWire, expects rates to range between 5.75% and 7.25% throughout the coming year.Many economists say President-elect Donald Trump'sproposed policies, which include tax cuts and sweeping tariffs, could stimulate demand, increase deficits and cause inflation to reheat. That could prompt the Fed to delay future rate reductions, keepingfinancing rates higher for longer.Trump promised that mortgage rates would return to their pandemic-era lows of around 3% under his administration, but that's unlikely to happen. Mortgage rates typically only fall that low during severe economic downturns. In fact, given the ongoing strength of the economy, the Federal Reserve isprojecting fewer interest rate cutsnext year.Even so, the Fed doesn't set mortgage rates directly, and neither does the White House lenders do. Mortgage interest rates are closely tied to the 10-year Treasury bond yield, and bond market investors drive yields higher or lower based on what they believe will happen in the future, not what's happening now."While there is uncertainty on the extent of the inflation impact of Trump's policies, higher inflation expectations tend to lead to higher bond yields and mortgage rates," saidBeth Ann Bovino, chief economist at U.S. Bank.How much can mortgage rates change in one year?Mortgage rates fluctuate daily, usually by just a few basis points (one basis point is equivalent to 0.01%). The mortgage market is also prone to volatility. Over the course of a year, mortgage rates can change a lot or not very much at all.Historically speaking, the biggest swings in mortgage rates were accompanied by economic catastrophes (e.g., surging inflation, the start of a recession, etc.) that drove bond yields significantly higher or lower for a sustained period of time.In 2022, for example, mortgage rates increased from around 3% to above 7% within the span of 10 months due to surging inflation and the Fed's aggressive rate hikes. That's a 4% difference in less than a year. Compare that to 2024: The difference between this year's peak (7.33%) and bottom (6.1%) is just over 1%.Mortgage rates might move in a similarly narrow range in 2025, particularly if economic growth remains steady and future data doesn't give investors cause for concern.But a new presidential administration, shifts in the geopolitical outlook and the potential for inflation to reignite all have the power to move mortgage rates by more than 1% in either direction, said Colin Roberston, founder of the housing market site The Truth About Mortgage.For example, in the dire scenario where the US moves toward a recession and inflation falls well below target, mortgage rates could get to the 4% range, according to Matt Graham of Mortgage News Daily. "In the opposite scenario, where the economy is strong, inflation persists and national deficits increase, mortgage rates could move toward or above 8%," Graham said. What would cause mortgage rates to increase in 2025?The same reason mortgage rates surged in 2022 is also what could cause them to increase next year: inflation.Inflation is a key measure of the health of the economy and influences the Fed's decision to adjust interest rates. It also impacts the bond market, where mortgage rates are determined. High inflation curtails investor demand for longer-term bonds, causing their prices to fall and mortgage rates to increase.Trump's proposals include a universal 20% tariff on all imports with a possible 60% tariff on imports from China. If implemented, these tariffs would be inflationary, as businesses are likely to pass those costs onto consumers and raise prices. Tax cuts could also decrease fiscal revenue and raise national deficits, resulting in higher long-term bond yields.The Fed has a 2% target rate for annual inflation. If the official inflation rate moves much higher than that in 2025, the central bank is less likely to enact interest rate cuts, which could put upward pressure on mortgage rates."At the most basic level, rates are always going to be influenced by the state of the economy and inflation," said Graham.What would cause mortgage rates drop in 2025?Lower mortgage rates next year are still possible, but a few conditions must be met first.Assuming Trump's policies don't supercharge inflation in 2025, it would take significantly weaker economic conditions (including a declining labor market) and a drop in 10-year Treasury yields to open the door to lower rates."If the unemployment rate rises or hiring slows considerably, then borrowing costs, including mortgage rates, could fall," said Sturtevant. The Fed typically responds to economic downturns by cutting interest rates, and banks and lenders typically pass along rate cuts to consumers in less expensive longer-term loans, including mortgages.In that case, 30-year fixed mortgage rates could fall just below 6%, Mohtashami said. But it's unlikely mortgage rates can move much lower than that unless new economic policies result in a meaningfully lower government debt deficit. What other factors are affecting the housing market in 2025?Even if average mortgage rates were to fall by 1% in 2025, it won't make homebuying affordable for most Americans, particularly low- and middle-income households.Since 2020, home prices have increased more than 40%. And while home price growth has since slowed, it's still up 5.1% on an annual basis. Prices are expected to increase by just under 2% in 2025, said Selma Hepp, chief economist at Core Logic.Part of the reason home prices are so high is that the housing market is short roughly one to four million houses. Over the last several years, new home construction has lagged due to rising construction costs and strict zoning regulations. When homebuying demand outweighs supply, prices go up.That applies to existing home inventory, as well. As most current homeowners have interest rates below 5%, they're less inclined to sell since it would mean buying a new home at a higher rate. Both the "rate-lock effect" and the lack of new housing construction have effectively frozen the housing market.While experts expect housing inventory to improve in 2025, it will take years to make up for the ground lost.Should you wait or buy in 2025?If you're one of the millions of would-be homeowners waiting for rates to drop, know that the macroeconomic issues plaguing the housing market today are out of your control. Only you can determine if you're financially ready to purchase a home and handle all its expenses. "In 2025, I would not focus on mortgage rates," said Jeb Smith, licensed real estate agent and member of CNET Money's expert review board. Smith recommends prioritizing things that can lower your individual mortgage rate, like saving for a bigger down payment and boosting your credit score.Instead of trying to time the real estate market, Smith said to focus on the factors you can actually control.More on today's housing market