The Fed lowered borrowing costs by 25 basis points on September 17, 2025, a move Chair Jerome Powell framed as a “risk management” cut to bolster an increasingly fragile labor market. The decision was nearly unanimous, with the only dissent coming from Stephen Miran, a Trump ally who officially joined the Fed board this week and favored a 50 basis-point move.
The median projection from Fed officials suggests there will be two additional quarter-point interest rate cuts by the end of 2025. This would bring the federal funds rate down to a range of 3.5%–3.75% by year-end.
That sounds great. Rates should continue to fall. Maybe not. Let’s hope history doesn’t repeat itself.
So far in September 2025 the lowest 30-year rate was 5.625% for a couple days. You need to be at 60% loan to value and 760 or higher credit score. After the Fed announced a cut of only 25 basis points the mortgage rates went up. This is not a typo. After September 17, 2025, the lowest 30-year mortgage rate was at 5.875%. These are my rates and not the national average.
The Fed made three interest rate cuts in 2024, with 50 basis points reduction in September, 25 basis points in November and December, lowering the federal funds rate from a range of 5.25-5.5% to 4.25-4.5%. These cuts were a response to weakening labor market conditions, which began to take precedence over inflation concerns. Same story as what is going on right now in 2025.
The national average 30-year mortgage rate in September of 2024 was 6.125%. (Alterna Mortgage was at 5.75%). The national average 30-year mortgage rate in October 2024 was 6.5%. The national average 30-year mortgage rate in November and December 2024 was 6.88%.
See the pattern. If the rate is good, lock it. My favorite quote, “Mortgage rates rise like a rocket and fall like a feather”
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