Rate Watch Market Developments: September 18, 2025

A Long-Awaited Rate Change

The Fed Pulls the Trigger
At its September meeting, the Federal Reserve lowered the benchmark rate by 0.25%. Policymakers explained the move as a response to a slowing labor market, even as inflation remains above target. The adjustment is intended to support employment while keeping pressure on prices.

Why the Change Now?
The Fed noted that the labor market is softening, with job growth slowing and risks to employment rising. Inflation remains above target, but policymakers believe protecting jobs is equally critical in today’s climate of economic uncertainty.

Impact on Mortgage Rates
The Fed doesn’t directly set mortgage rates, but its actions steer investor confidence. Mortgage rates had already eased before this meeting, and further cuts could lead to additional declines. However, nothing is guaranteed since global events and economic data also play a role.

What This Means for Homebuyers

Should You Wait or Act?
• Waiting for more cuts could mean facing higher competition and rising home prices.
• Rates are unpredictable. Acting now could allow you to secure today’s advantages.
• Renters who buy now can begin building equity instead of watching prices climb.

Financing Options Worth Exploring
• Buydowns can lock in permanently lower fixed-rate payments.
• HELOCs provide access to cash while preserving your existing mortgage rate.

Our team can help you compare today’s market with potential future scenarios, provide a qualification review, or secure a pre-approval to give you an edge when making an offer.

Fed Policy in Perspective

A Quick Refresher
The Federal Reserve manages the federal funds and discount rates, which determine the cost of overnight borrowing between banks.
• In March 2020, rates were cut near zero to support the economy during the pandemic.
• When inflation surged in 2022, the Fed began raising rates aggressively.
• The first policy cuts since then arrived in September 2024, followed by two more later that fall.

If you’re thinking about buying, refinancing, or tapping into home equity, don’t let uncertainty about rates hold you back. At Thompson Kane, we’re closing loans every day and are here to help you make confident moves in today’s housing market.