September 22, 2025
Some experts wondered if mortgage interest rates might decline after a cut by the Federal Reserve. In reality, though, the interest rates went down in anticipation of the cut, which came on Sept. 17, and then ticked back up even though the Fed Reserve chairman Jerome Powell announced a quarter-point cut to benchmark interest rates.
According to Mortgage News Daily, the average 30-year fixed mortgage rate was 6.35 percent on Sept.19, up from 6.13 percent the day before the Fed Reserve cut the rate. Claire Boston, a senior reporter for Yahoo Finance, wrote that the rate increase is a counterintuitive but common phenomenon.
A range of factors influence mortgage interest rates and the Fed Reserve’s benchmark interest rate is just one. Powell and the Reserve find themselves trying to determine its focus between inflation and the labor market. Rate cuts indicate they’re focusing on lagging job reports, but bond traders don’t want them to take their eyes off lowering inflation.
Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, told CNBC News that bond traders took the news as a signal to sell. “(They) don’t want the Fed to be cutting interest rates,” Boockvar said.
However, even with the slight uptick, industry leaders hope the general trend towards lower rates will boost the stagnant home buying market. Observers already have an increased interest in refinancing with Borrowing costs on 15-year fixed-rate mortgages, falling to below 5.5%.
“Everybody is calling about refinancing; it’s one of the main topics,” Guild Mortgage’s Rob Pinion recently told Tampa Bay 28 News.
Looking ahead, the 2025 buzz word of the year – uncertainty – certainly applies to what mortgage rates might do. As Boston, the Yahoo Finance reporter notes, the Fed cut rates three times between September and December of last year, and mortgage rates rose throughout that period. Fed officials have hinted at two more rate cuts this year, but no one can say for certain how those cuts will impact mortgage rates.