Good Friday morning from your Hometown Lender,
Rates are holding steady(ish) with a bias towards a little higher. Hopefully, we will see less volatility on rate sheets, which got a little too good before the Fed meeting and then a little too bad after it. Bonds will spend the day drifting, ahead of next week which is filled with Fed speakers and some important data toward the end of the week. Specifically, GDP, Unemployment Claims, and PCE inflation data. The outlook though has definitely shifted, now looking like rates creeping back to August levels (as much as a half-point higher than where we are at today) a possibility (but not yet a probability). The bias for the short term has to be to lock and float down on any improvement.
Some higher level analysis:
🏦 Mortgage Market & Rate Analysis
Friday, September 19, 2025
📊 Where Rates Stand Today
30-Year Fixed: ~6.23% (unchanged from yesterday)
15-Year Fixed: ~5.41%
10-Year Treasury Yield: ~4.12%
Trend: Rates are holding near their lowest levels in nearly a year, following the Fed’s rate cut and softer economic data earlier this week2.
📰 Today’s Economic Highlights
- Leading Economic Indicators (LEI): Released today, this composite index tracks future economic activity. A decline would signal slowing growth and support lower rates.
- Mortgage Applications: Purchase applications surged this week, reaching the highest year-over-year growth rate in over four years — a sign that buyers are responding to lower rates.
- Homeowner Costs: Reports show a dip in monthly housing costs, driven by falling rates and stabilizing home prices.
🗓 Weekly Recap & Market Drivers
- Fed Rate Cut (9/17): The Federal Reserve lowered its benchmark rate by 25 basis points to 4.00%–4.25%. This was the first cut since December 2024 and reflects growing concern over a softening labor market.
- Retail Sales (9/16): Flat for August, signaling cautious consumer spending — a rate-friendly sign.
- Housing Starts & Jobless Claims (9/18): Housing starts slowed slightly, and jobless claims rose to 263,000 — the highest since 2021. Both point to a cooling economy.
- Market Reaction: Treasury yields dipped ahead of the Fed’s announcement, and mortgage rates followed. The S&P 500 and Nasdaq slipped slightly, while the Dow posted modest gains.
🏛 Political & Policy Developments
- Fed Messaging: Chair Powell emphasized that future cuts will depend on incoming data. The Fed’s “dot plot” shows a slim majority of officials expecting two more cuts by year-end.
- Dissenting Voices: New Fed Governor Stephen Miran pushed for a more aggressive 0.50% cut, reflecting internal debate and political pressure.
- Legislative Watch: Senator Catherine Cortez Masto requested updates on FHLBank reforms, signaling continued scrutiny of housing finance policy.
- Market Sentiment: Political uncertainty and global trade tensions continue to influence bond demand and inflation expectations.
🔮 Rate Outlook & What to Watch
Short Term (Next 1–2 Weeks):
- If economic data continues to soften, rates could dip further.
- If inflation surprises or growth rebounds, expect rates to stabilize or tick up slightly.
Medium Term (Fall 2025):
- If the Fed follows through with additional cuts and economic data stays soft, well-qualified borrowers could see rates in the high-5% range by year-end.
- Risks: Sticky inflation, weak Treasury auction demand, or geopolitical shocks.
📅 Key Economic Calendar – Sept 23–27, 2025
Tue 9/24 – New Home Sales (August) (Medium)
Wed 9/25 – Durable Goods Orders (Medium)
Thu 9/26 – GDP Final Estimate (Q2) (High)
Fri 9/27 – Personal Income & Spending, PCE Index (Very High)
💡 Takeaway
“Mortgage rates are holding near their lowest levels in nearly a year, thanks to the Fed’s rate cut and signs of a cooling economy. But because markets often move before the Fed — and sometimes bounce afterward — this could be a short-lived window. If you’re considering a refinance or purchase, now’s a great time to explore your options while rates are still favorable.”
Stay safe, enjoy the weekend, but first… make today great!