For the first time in months, mortgage rates are heading downward — and the ripple effects could be significant for both home buyers and home sellers. With the Fed’s recent 0.25% rate cut, affordability is improving and market momentum is beginning to shift.

Let’s unpack what’s happening, why it matters, and what it could mean for you.

⸻

Why Mortgage Rates Dropped

Mortgage rates don’t move in isolation — they’re influenced by several key factors. This recent dip is driven by:

• The Fed’s 0.25% rate cut: Lower borrowing costs ripple through the economy, easing rates for consumers.
• Cooling economic data: Slower job growth and easing inflation are signs of a softening economy.
• Lower Treasury yields: Mortgage rates tend to follow the 10-year Treasury yield, which has fallen in recent weeks.

The result? The average 30-year fixed mortgage rate is now sitting around 6.35%, the lowest it’s been in nearly a year. (*based on a 30-year fixed mortgage as of September 24th, 2025)

⸻

What This Means for Buyers

• More purchasing power: Lower rates = lower monthly payments, which can expand your budget.
• Better affordability: According to the National Association of Realtors (NAR), if 30-year rates fall to ~6%, about 5.5 million more U.S. households could afford a median-priced home.
• Real demand growth: Of those households, around 10% (≈ 550,000 buyers) are expected to actually purchase within the next 12–18 months.

If you’ve been waiting for the right time to buy, this could be the moment to get pre-approved and see how much more home you can afford.

⸻

What This Means for Sellers

For homeowners thinking about selling, this shift is just as impactful:

• More qualified buyers: As affordability improves, the pool of potential buyers grows.
• Greater competition: More buyers in the market can lead to stronger offers and potentially faster sales.
• Timing opportunity: If you’ve been hesitant to list, now may be the perfect time to connect with your broker before competition among sellers increases.

⸻

Should You Wait or Act Now?

It’s tempting to hold out for even lower rates, but timing the market is tricky. Rates could continue to fall if the Fed cuts further, but they could just as easily rise if inflation spikes or economic data shifts.

The best move? Know your numbers, understand your options, and make a decision that aligns with your financial goals — not just the headlines.

⸻

Bottom Line

With mortgage rates dipping and the Fed signaling a shift toward looser policy, the housing market is poised for renewed activity. Whether you’re buying your first home, considering a move, or preparing to sell, this rate environment presents new opportunities.