Mortgage Update - September 15th, 2025
It’s Fed Week!
Nick and I feel like kids waiting at the top of the stairs on Christmas morning—ready to see what Jerome Powell has wrapped up for us 🤗 A rate cut is almost guaranteed, but will it be the expected 0.25%… or will the Fed surprise us with a bigger 0.50% cut?! Only time will tell, but in the meantime, we’re breaking down our predictions and what it could mean for the market! Let's gooo!
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Read time: ~4 minutes
Lowest Rates in Over a Year!
Opportunities like this don’t come around often. Right now, we’re in one of those rare windows where mortgage rates have dipped to their lowest levels in years—yet many buyers are still sitting on the sidelines.
So why have mortgage rates trended lower within the past couple of months?
Anticipation of Federal Reserve Rate Cuts
It’s nearly certain that the Fed will cut rates this Wednesday. Markets tend to move ahead of the official action, which is why mortgage rates have been sliding in anticipation.
Signs of a Slowing Job Market
We've said it time in time again: when the job market weakens, mortgage rates usually follow. The Bureau of Labor Statistics just revised its data, revealing 911,000 fewer jobs were created between April 2024 and March 2025 than initially reported 🤯. That’s a clear sign of trouble.
Weaker Consumer Confidence
The University of Michigan’s consumer sentiment index has now declined for two straight months. Americans are growing less optimistic about business conditions, job security, and income growth.
Tamer Inflation
Inflation is still a concern, but the good news is it hasn’t been running hotter than expected. That stability gives the Fed more room to start signaling rate cuts.
Key Takeaway: When the economy shows signs of slowing, mortgage rates usually respond by moving lower. With the job market cooling, consumer confidence slipping, and inflation staying manageable, the stage is set for lower mortgage rates!
What Will Happen AFTER the Fed Cuts Rates?
Last week, mortgage rates dropped to their lowest point of 2025! While everyone’s celebrating the dip, Nick and I couldn’t shake the feeling of déjà vu—because we’ve seen this exact scenario before.
Exactly a year ago, in September 2024, the Fed cut rates by 0.50%. Everyone in the industry went bananas, saying rates would keep falling and the market was about to take off! But within a month, mortgage rates jumped from the low 6% range to over 7% 👀😭
So why did mortgage rates increase in September 2024 after the Fed had just cut rates by 0.50%? It's because leading up to the September meeting, investors had already priced in the Fed rate cut. In other words, the market expected it, so the cut itself wasn’t “new news.”
What mattered even more was the economic data that followed the rate cut.
Shortly after the rate cut, we received stronger-than-expected growth and labor reports which eased recession fears. The economy looked healthier on paper—and that pushed mortgage rates higher.
With that said, this year does look different. The job market is clearly much weaker than in 2024 and people are starting to struggle.
What happens next will depend on the data:
Jobs improve + inflation rises: mortgage rates could climb, like in 2024.
Jobs weaken further: rates may drift even lower.
Key Takeaway: Mortgage rates hit their lowest point of 2025, but history shows a Fed rate cut doesn’t automatically push rates lower. What matters most is the economic data—strong jobs and growth can send rates up, while a weaker labor market could push them even lower.
Days on Market Keep Climbing!
Even as someone who tracks the housing market very closely, the latest data truly caught my attention:
The first thing that jumped out was the stark regional differences. Homes in the South are taking nearly twice as long to sell as those in the North. Even in the fastest-moving states, it now takes an average of 42 days to sell a home.
For agents, this is more than just a statistic—it’s a critical conversation starter at every listing appointment! The era of homes flying off the market in 48 hours for above asking price is over. Sellers need to understand that realistic pricing and timelines are essential in today’s market.
Nick and I believe the underlying drivers are clear. It is a weakening labor market that is slowing buyer activity, which in turn pushes days on market higher. The hotter markets of the past are cooling, and homes that might have sold in a week or two are now lingering for over a month.
Being proactive with clients is key. We need to ensure we are walking them through the numbers, explain the regional differences, and set expectations about what a fair timeframe and pricing strategy look like. Because we all know, transparency builds trust—and in a market that’s shifting, trust is more important than ever.