On Sept. 17, the Federal Reserve voted to cut the federal funds rate by 25 basis points. A basis point is one one-hundredth of a percentage point.<\/p>\n
Mortgage lenders anticipated this move; last week, the average 30-year mortgage rate fell below 6.5% for the first time in 2025. \u201cRates have been trending downward lately, and while we\u2019re not seeing dramatic drops, the momentum is encouraging,\u201d said Chris Lim, chief growth officer at Re\/Max Holdings, a global real estate brokerage network.<\/p>\n
Why now?<\/p>\n
According to the latest Consumer Price Index released on Sept. 11, inflation rose 2.9% year-over-year in August, the highest measure since January. While rising inflation would typically encourage Federal Reserve<\/a> to raise rates, a weakening job market has pulled central bankers in the other direction.<\/p>\n The unemployment rate has been climbing since June, reaching its highest level since 2021. The August jobs report, released on Sept. 5, raised concern among economists<\/a> \u2014 the U.S. added just 22,000 jobs, less than a third of the projected 75,000. Sectors sensitive to economic policy changes, like federal government jobs and wholesale trade, saw especially sharp declines.<\/p>\n The Fed aims to strike a balance between inflation and unemployment. The trouble is that these are usually inversely related: high unemployment most often means low inflation. With both factors on the rise, central bankers\u2019 path becomes more complicated.<\/p>\n What\u2019s next?<\/p>\n According to Lim, mortgage rates<\/a> could continue to ease through late fall and winter. \u201cInflation data and broader economic signals will continue to play a big role, so I wouldn\u2019t expect rates to plummet \u2014 but a slow, steady decline could be on the table, which is good for buyers.\u201d<\/p>\n Analysts are currently predicting that the Federal Reserve will vote to cut rates again in October and December, by another 25 basis points each time. If this happens, mortgage rates could fall by about 50 basis points by the end of 2025, possibly even below 6%. The weekly average 30-year rate has not dropped below 6% since September 2024.<\/p>\n More From NerdWallet<\/p>\n Taylor Getler writes for NerdWallet. Email: tgetler@nerdwallet.com.<\/p>\n The article Fed Cuts Rates 25 Basis Points; Mortgage Rates Fall to 2025 Low<\/a> originally appeared on NerdWallet.<\/p>\n If you purchase a product or register for an account through a link on our site, we may receive compensation. By using this site, you consent to our User Agreement<\/a> and agree that your clicks, interactions, and personal information may be collected, recorded, and\/or stored by us and social media and other third-party partners in accordance with our Privacy Policy.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"On Sept. 17, the Federal Reserve voted to cut the federal funds rate by 25 basis points. A…\n","protected":false},"author":2,"featured_media":170365,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-170364","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/170364","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=170364"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/170364\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/170365"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=170364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=170364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=170364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}