Fed Cuts Rates Again: What It Means for Homebuyers and the Market

The Federal Reserve just announced its second rate cut of the year, and it is making waves across the mortgage and housing markets. With another meeting coming in December, many are wondering if additional cuts could follow.

Here’s what it means for you, whether you are buying, selling, or guiding clients through the process.

The Fed’s Second Rate Cut of 2025

This week, the Federal Reserve lowered the benchmark rate by 0.25%, setting it between 3.75% and 4%. The move reflects the Fed’s ongoing effort to balance inflation pressures with signs of a cooling job market.

Although the Fed Funds Rate does not directly determine mortgage rates, it influences borrowing costs across the economy, including home loans. With inflation still higher than the target and job growth slowing, the goal is to keep the economy stable without halting progress.

Bottom line: The Fed is taking a careful approach to keep inflation contained while supporting growth. Whether another rate cut happens in December will depend on upcoming economic data.

Home Prices Showing a Softer Trend

Recent housing data shows home prices are still up compared to last year, but the pace of growth has started to slow. While national home values remain slightly higher, monthly increases have become smaller as the market adjusts to changing rate conditions.

Bottom line: Prices remain steady, but growth is cooling. If mortgage rates continue to decline, more buyers could reenter the market, putting renewed pressure on prices.

Pending Home Sales Hold Steady

Home sales activity has remained steady heading into fall, with pending contracts on existing homes holding flat month over month. Despite this, activity continues to hover near one of the strongest points of the year.

Compared to last year, contract signings are down slightly, showing that many buyers are still adjusting to higher borrowing costs. However, with rates trending lower, affordability is gradually improving, and more buyers may return in the coming months.

Bottom line: The market remains resilient. As rates continue to ease, sales activity could pick up and support stronger momentum heading into the new year.

What This Means for You

If you have been waiting for the right time to buy or refinance, this could be your chance. Lower borrowing costs and stable home values create an opportunity to move forward confidently.

At The Mortgage Gurus, we help homebuyers and homeowners every step of the way, from locking in competitive rates to closing on time with ease.

DM us or click the link below to start your pre-approval today.