The Federal Reserve recently trimmed its benchmark interest rate by 0.25 percentage points, bringing the federal funds rate down to the 4.00% to 4.25% range (apnews.com). This is the Fed’s first rate cut of 2025. Officials have also signaled that there are likely to be two more cuts before the year ends (reuters.com).
What does this mean for homebuyers and sellers? For buyers, lower interest rates tend to mean lower mortgage costs or more buying power for the same monthly payment. Some experts expect that this cut, along with the ones likely coming, could help bring down mortgage rates and improve affordability (wsaz.com). On the flip side, that usually draws more buyers into the market, which increases competition and can put upward pressure on prices or shorten days on market (usbank.com).
If you are a seller who has had a listing sit for a while, this could be encouraging news. More buyers entering the market means more showings and potentially stronger offers. And if you are a buyer, this might be the right moment to act. If you find a home you like, it may make sense to move forward now before competition grows. I have always told clients to “marry the house and date the interest rate.” If you get the right house at a fair price today, even with a higher rate, you can always refinance later. In many cases, the monthly payment is similar to waiting for the perfect rate while paying more for the property.
Keep in mind that every situation is unique. Your credit, down payment, and long term plans all matter. But overall, this rate cut could bring momentum back to the market for both buyers and sellers.
If you are looking for an agent to help you buy a home and get preapproved, I work with many lenders who can get you preapproved very quickly. From there, I can guide you through the process and help you find your dream home!
