This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Market Commentary:
From December 5th to December 11th, interest rates remained flat. The Federal Reserve cut interest rates by 25 basis points at the conclusion of its two-day meeting on Wednesday, marking the central bank's third cut of the year. Fed officials were split on the decision to lower rates to a range of 3.50%-3.75%, with policymakers dissenting on both sides. This brings borrowing costs to their lowest level since 2022. The reasoning was labor market slowdown, inflation pressures, and government data delays.
In announcing the decision, the Federal Reserve signaled that it may want to see more economic evidence to support additional rate cuts in 2026. In quarterly economic projections issued along with their latest statement, Fed officials signaled they expect to lower rates just once next year. "In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook and the balance of risks," the Federal Open Market Committee, or FOMC, said in its statement.
FedWatch: Target rate (in bps) possibilities, according to the CME Group (as of 12/11/2025 – 12:00 PM EST):
Construction Labor Market Stable:
Fed Figures:
Unsurprisingly, the Fed lowered rates by 25bps because ongoing labor market deterioration concerns more members of the Fed than the elevated inflation levels. Despite heated rhetoric about strong reluctance to cut more, like what was said in October, they’ll cut more. As for buying T-bills, don’t confuse it with QE, that requires buying long bonds. Substantially more data will be available by the next meeting, which could meaningfully change policy. - Elliot Eisenberg, Economist
News You Can Use:
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• Soaring Insurance Premiums Have Homeowners Gambling With Their Coverage To Save Money
• The Average Buyer’s Agent Commission has Risen Slightly Since New NAR Rules Went Into Effect
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• November 2025 Housing Market Trends Report
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*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 12/11/2025, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to
property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by HomeServices Lending, LLC. Not available in all states. Rate is as of 12/11/2025 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
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