Issue 130 - Hello and Happy Tuesday.

The Fed delivered its first rate cut of the year, but mortgage rates actually ticked up slightly, just as expected. Markets had already priced in the move, so don’t look for a big drop in rates until the data gives the Fed more reason to ease further.

Personal Note:
This is embarrassing. With all of the business movement and other things going on, I totally neglected sending out our annual Oktoberfest invite for this Saturday.

If you can make it, please do. We have a great time each year. Entry fee is 1 unwrapped toy for Toys for Tots! I hope you can make it, and please accept my apologies for the super-late invite!

TLDR (Too Long Didn’t Read) Summary

• ⬆️ RATES - As expected, mortgage rates skewed upward.

• 📊 TECHNICALS - 25bps cut, builders optimistic.

INTEREST RATES
Rates 📢 September 23rd, 2025

Rate data as of morning of publication. Unless noted otherwise, all scenarios are assuming 30 Year-Fixed mortgage, Purchase or R/T Refinance. No origination points charged, 780 FICO score, and 20% down payment. Provided for consumer education only and does not serve as a binding offer to extend lending. Payment period, interest rate, APR, and other terms subject to income, asset, and credit profile qualification. Provided courtesy of GTG Financial, Inc. NMLS 1595076. Equal housing opportunity. www.nmlsconsumeraccess.org

💡 Why This Matters

✅ Fed Cut Was Expected – The Fed lowered its benchmark rate by 0.25% on 9/17, and markets had already priced this in. That’s why we didn’t see a major drop in mortgage rates following the announcement.

✅ Mortgage Rates Moved Higher – Despite the Fed cut, most mortgage products actually ticked up last week. Conventional loans rose by 0.25%, Jumbos and FHA/VA loans increased by 0.125%. The only exception was high-balance conventional, which held flat.

✅ Short-Term Relief vs. Long-Term Outlook – The Fed is trying to keep credit conditions supportive, but mortgage rates are more influenced by inflation expectations and bond market activity. Traders are watching this Friday’s PCE inflation report closely, which could set the tone for where rates head next.

Realtor Insight 🔑: Buyers may assume a Fed cut automatically means lower mortgage rates—but that’s not the case. Rates actually moved up, so it’s critical to set expectations properly and remind clients that inflation and bond demand, not Fed moves alone, drive mortgage pricing.

TECHNICALS

Fed Cuts Rates for the First Time This Year 

The Fed dropped rates by 0.25% (to 4.00–4.25%) after holding steady at five straight meetings. This move signals concern over the slowing job market.
👉 For buyers: Lower borrowing costs ripple through the economy and may eventually ease mortgage rates.
👉 For sellers: Lower rates could help bring more buyers off the sidelines this fall.

🏗️ Builders Cautiously Optimistic
Builder confidence is still weak overall but expectations for future sales hit a 6-month high. The Fed’s cut could also reduce builders’ financing costs for new projects.
👉 Realtor insight: A potential lift in builder activity down the road could help relieve supply shortages—but not right away.

🛍️ Retail Sales Still Strong
Consumers spent more than expected in July, with big gains in online shopping and back-to-school categories.
👉 Why it matters: Strong spending keeps the economy moving, which could slow down how quickly mortgage rates fall.

👷 Jobless Claims Drop, But Labor Market Still Soft
Initial claims fell sharply last week, but continuing claims remain elevated, showing it’s harder for people to find new jobs.
👉 Realtor insight: A weakening job market could put pressure on rates to move lower, but it also means some buyers may face tighter loan approval hurdles.