Wed, 17 Sep 2025

Wed, 17 Sep 2025 Could the US interest rate cut boost the housing market?

Borrowing costs are not guaranteed to come down much more than they already have, even after this week's rate cut.

* Aileen Barrameda plans to buy a house in Los Angeles, despite mortgage rates being twice what they were at the start of the pandemic.
* Mortgage rates have fallen to 6.35% on the 30-year loan, but buyers like Aileen may not see further significant reductions.
* The Federal Reserve's interest rate cut does not directly affect mortgage rates, but influences what banks charge each other and their customers for loans.
* Prospective homebuyers may be disappointed if they're waiting for substantially lower mortgage rates.
* Rising inflation could push mortgage rates up, as the Fed tends to avoid cutting borrowing costs when inflation is high.
* The US housing market remains unaffordable for many people, with low mortgage rates at the pandemic height making homeowners hesitant to sell and downsize.
* Only 20% of current mortgage borrowers have locked in a rate above the current average of 6.35%.
* Despite recent dip in mortgage rates, there are no signs of substantial relief on the horizon.
* Buyers like Kristin Carlson are eager to purchase soon to avoid being priced out by further competition.
* Modestly lower mortgage rates are offering some relief and spurring activity among buyers, but may not be enough to fix the housing market's strain.
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