Powell Hints at Change
At the Jackson Hole Economic Policy Symposium on August 22, 2025, Federal Reserve Chair Jerome Powell suggested that a Federal Reserve rate cut may be coming in September. He acknowledged that while inflation in 2025 remains above the Fed’s 2% target, slowing job growth is raising concerns. Powell stressed that the Fed will remain data-driven and independent from politics, leaving the decision to upcoming economic reports.
Impact on Mortgage Rates and Housing Market 2025
Although the Fed does not set mortgage rates directly, its decisions heavily influence broader financial conditions. A potential September Fed rate cut could encourage lower mortgage rates in 2025, giving homebuyers more affordability and motivating sellers with stronger demand. However, mortgage rates also follow 10-year Treasury yields, so the Fed’s move is one of several factors that shape housing affordability.
Inventory and Home Prices
The housing market in 2025 is showing encouraging signs of balance. Housing inventory jumped 26% year-over-year in July, with over 1.4 million homes for sale, the highest level since 2017. At the same time, home prices are moderating, with the median price up just 2.1% year-over-year to $393,000. For buyers, this means more options and better negotiating power. For sellers, it highlights the importance of pricing competitively in a market that’s becoming less overheated.
What to Watch Next
All eyes are on September economic data, including jobs and inflation reports, which will guide the Fed’s next step. The Federal Reserve’s September 16–17 meeting could mark the first rate cut in months, opening the door to more affordable financing and renewed buyer activity in the fall housing market.
Bottom Line for Buyers and Sellers
A possible Fed rate cut in September 2025 could be the turning point for the housing market. Buyers may benefit from lower mortgage rates and increased inventory, while sellers could see stronger demand. Staying informed about these shifts will help you time your move strategically in today’s evolving real estate market. We can guide you, let’s connect!
