On September 17, 2025, the Federal Reserve cut its benchmark interest rate by 0.25% — the first cut of the year. While the Fed’s move doesn’t directly change mortgage rates, it sets the tone for borrowing costs and the housing market as a whole. Here’s what that means if you’re buying, refinancing, or selling.
The Fed Funds Rate vs. Mortgage Rates
It’s a common misconception that the Fed “sets” mortgage rates. In reality:
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The Fed funds rate is the overnight lending rate between banks. It mostly affects short-term borrowing like credit cards, auto loans, and HELOCs.
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Mortgage rates, especially 30-year fixed loans, move more in line with the 10-year Treasury yield and demand for mortgage-backed securities.
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Fed policy influences these markets indirectly by shaping inflation expectations and investor confidence.
So while a Fed cut doesn’t instantly lower mortgage rates, it often creates conditions that allow them to ease.
Where Mortgage Rates Are Today
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30-year fixed mortgages are now in the low-to-mid 6% range, down from the mid-7% range peaks seen in 2023–2024.
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15-year fixed loans and ARMs can often be secured in the 5%–5.5% range, depending on credit and loan structure.
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Many analysts expect rates to gradually trend lower into 2026 if inflation continues to cool and the Fed stays on an easing path.
Should You Act Now or Wait?
One question I hear often: “If rates may drop further, should I wait?”
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Why waiting could help: If the Fed cuts again and inflation continues easing, we may see additional declines in mortgage rates. A future refinance could lower payments further.
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Why acting now makes sense for many: If you’re ready to buy or refinance, waiting has risks. Home prices could rise, competition could increase, and there’s no guarantee rates will move lower on your timeline.
My approach: I help clients weigh the numbers today versus the potential of tomorrow. Sometimes that means acting now and capturing savings immediately. Sometimes it means structuring a plan where you buy or refinance today, with the option to revisit if rates drop further.
Benefits for Homebuyers
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Improved affordability: Even a small drop in rates reduces monthly payments.
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Increased buying power: Lower rates may expand what you qualify for.
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Early advantage: Acting now can help you secure financing before added demand drives more competition.
Benefits for Homeowners Considering a Refinance
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Rate-and-term refinance: Moving from the mid-7% range into the low-to-mid 6’s can unlock significant savings.
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Cash-out refinance: Access equity for renovations, debt consolidation, or investments.
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Smart strategy: I calculate the break-even point for clients to ensure refinancing is truly worthwhile.
Benefits for Sellers
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More qualified buyers: Lower rates expand the buyer pool.
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Quicker sales: Improved affordability often reduces time on market.
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Stronger offers: Buyers with lower payments may stretch further on price, improving your net proceeds.
For sellers, lower rates aren’t just good news for buyers — they can directly improve your ability to sell quickly and profitably.
Why Work With Me — Your One-Stop Shop
As both a REALTOR® and Loan Officer, I provide full real estate and mortgage guidance under one roof. That means:
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For buyers: I help you find the right home and secure the best financing from multiple lenders.
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For homeowners: I review refinance options and tailor them to your long-term goals.
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For sellers: I market your home effectively while connecting buyers directly to financing.
This integrated approach saves time, reduces stress, and ensures you don’t miss opportunities by juggling multiple professionals.
Bottom Line
The Fed’s first rate cut of 2025 is good news for the housing market. With mortgage rates now in the low-to-mid 6’s, opportunities are opening up for buyers, homeowners, and sellers alike. Whether it makes sense to act now or wait depends on your personal goals and numbers — and that’s where I come in.
Ready to explore your options?
Contact me today for a custom mortgage and real estate review — I’ll shop across multiple lenders, guide you through the buying or selling process, and make the experience seamless from start to finish.
Ryan Trader
REALTOR® – Cal State Realty Services (DRE #01821025)
Loan Officer – C2 Financial Corporation (NMLS #135622 / MB #135622)
DRE License #01441131 | NMLS #1948061
📞 858-367-9192 | 📧 Ryan@RyanTrader.com