Another Rate Cut
Mortgage Rates Near the Lowest Levels of the Year
Borrowers who have been watching the housing market are seeing some good news: mortgage interest rates have fallen and are now near the lowest levels seen this year. A key reason is the Fed’s decision to cut its benchmark federal-funds rate most recently in October — a move that tends to pull down borrowing costs across the board (including home loans), even though mortgage rates don’t move one-for-one with the Fed target.
With mortgage rates coming down, many homeowners and potential buyers are in a position to consider locking a rate, refinancing, or moving ahead with a purchase while the environment is relatively favorable.
What the Fed Has Done So Far in 2025
Here’s a brief snapshot of the rate-cutting backdrop in 2025:
The Fed cut its target range by 25 basis points (0.25 %) in September. Reuters+3Trading Economics+3PBS+3
The Fed again cut the target in October, by another 25 basis points, bringing the funds-rate range down to 3.75%-4.00%. Reuters+1
This brings the total number of cuts in 2025 so far to two (each of 0.25 %). CBS News+2Reuters+2
What’s Ahead: More Cuts Expected into Late 2025 and Beyond
While two cuts have happened so far, the outlook suggests there may be more to come:
The Fed’s own projections (as of mid-year) indicated that “two rate cuts still seen in 2025” were likely. Reuters
Research by Goldman Sachs expects three cuts in 2025 and then two more in 2026. Reuters+1
Fed officials (e.g., Jerome Powell) have signalled that additional easing is “likely” depending on economic data. PBS
So while the Fed has already cut twice in 2025, many analysts and officials expect at least one more cut, possibly two, before year-end — and then further cuts into 2026.
Bottom Line
Mortgage rates are near their best levels of the year, thanks to two rate cuts by the Fed in 2025 (September and October). More cuts look likely — potentially one or more before year-end, and then continuing into 2026 — which bodes well for borrowers. If you’re in the market or thinking about refinancing, the current environment is attractive: the key now is to get your financial house in order and act when the deal makes sense.
