September Market Updates

THE FED CUT: What it Really Means for Mortgage Rates

FED Rates VS. Mortgage Rates – Not the Same

• The Fed cut rates by 0.25% last week, but mortgage rates didn’t drop much.
• Mortgage rates are more closely tied to the bond market-specifically the 1o-year Treasury yield-not just the Fed’s rate.
• The 0.25% cut was already expected and priced in by investors. Mortgage rates only fall with bigger or unexpected rate cuts.

Why Didn’t Rates Fall More?

• Markets watch what the Fed says as much as what it does. After this meeting, Chair Powell warned inflation could stay high until at least 2028—bad news for rates.
• The Fed’s small cut and tough inflation talk made bond investors cautious, so mortgage rates hardly budged.
• If the Fed had cut by 0.50%, rates would have improved-because surprise moves, not just expected changes, move markets.

What Actually Moves Mortgage Rates?

• Mortgage rates respond to the bond market’s expectations for inflation, Fed actions, and economic growth.
• Powell said it takes a “pretty big” rate change to make a real difference for mortgage borrowers.
• The real issue for housing is supply-“not a cyclical problem the Fed can address,” Powell noted. Even lower rates can’t fix the nationwide housing shortage.

Today’s Rates: September 22, 2025

• 6.267% + Conventional 30 YR Fixed
• 6.142% + Jumbo 30 YR Fixed
• 5.520% + Conventional 15 YR Fixed
• 6.291% + FHA 30 YR Fixed
• 6.489% + VA 30 YR Fixed
• 5.528% + Conventional 5/1 ARM