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:
Mortgage rates continue to trend down, increasing optimism for new buyers and current owners alike. As rates continue to drop, the number of homeowners who have the opportunity to refinance is expanding. In fact, the share of market mortgage applications that were for a refinance reached nearly47%, the highest since October. The Federal Reserve Open Market Committee is expected to cut its benchmark rate at the upcoming September 17, 2025 meeting by 25 basis points to a range of 4.00% to 4.25%. Chances of a rate reduction is currently listed at more than 95%, according to the CME Group's FedWatch tool.
Mortgage rates, while influenced by the Fed's monetary policy, aren't fully dictated by it. That means that rates can and potentially will change before the Fed adjusts rates – and that's a good thing this month as a lower federal funds rate looks imminent. Homebuyers and owners looking to refinance, then, should start the process of boosting their credit profile right away, that way they're ready and willing to take advantage when rates actually do finally fall lower.
Fed Watch: Target rate (in bps) possibilities, according to the CMEGroup (as of 09/04/2025 – 12:00 PM EST):
Open Construction Jobs Rise in July:
Cities Where Minimum-Wage Workers Must Work 80-Plus Hours Just to Pay Rent:
Investors Buy Nearly One-Third of Homes Across US:
Since 1980, there have been nine Fed easing cycles. Across those cycles, the Fed funds rate reduction averaged 232bps and the reduction in the 10-year Treasury averaged 72bps. Around a recession, cuts averaged 400bps and the decline in the10-year Treasury averaged 156bps. But outside of a recession, Fed funds cuts averaged 97bps and the slide in the 10-year Treasury was just 6bps. A recession is key to getting the 10-year Treasury down. - Elliot F. Eisenberg the Bowtie Economist
News You Can Use:
· Mortgage Rates Officially Hit 11-Month Low
· Waller, in the running for chair, says Fed should cut in September
· Job openings data falls to levels rarely seen since pandemic
· Surge in production underpins strongest improvement
· Over a Quarter of U.S. Homes, Worth $13 Trillion, Face Severe Climate Risk
· Best and Worst Cities for Rent on Minimum Wage
· When will housing costs return to 'normal?'
· Cheaper Mortgage Payments Bring a Trickle, Not a Surge, of Homebuying Demand
*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 09/04/2025, 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 09/04/2025 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.
.png)
