Each week, I analyze the evolving dynamics of the market, identifying emerging trends, shifts in momentum, and key considerations for real estate professionals. Last week, the Federal Reserve implemented a 25-basis point rate cut, bringing the Federal Funds rate to its lowest level in three years. This marks the second consecutive reduction this fall, with a potential third cut anticipated in December. However, future policy decisions may face increased scrutiny amid a mixed economic backdrop of labor market weakness and persistent inflation. Meanwhile, mortgage rates continued to decline; the average 30-year fixed rate fell to 6.25%, down 10-basis points from September and 17-basis points year-over-year. Pending home sales in September held steady, matching August’s revised 4.2% pace, the second-highest level recorded in 2025.
Below are key events from the fourth week of October impacting our business.
November 3, 2025
FED DELIVERS ANOTHER 25-BPS RATE CUT. MORTGAGE LENDERS PREPARE TO SCALE UP. The Federal Reserve reduced its benchmark interest rate by 25-basis points on Wednesday, setting the target range at 3.75% to 4%, the lowest level in three years. This policy adjustment reflects ongoing concerns over a weakening labor market and persistent inflationary pressures. Analysts anticipate a potential follow-up cut in December, which, alongside changes to the Fed’s balance-sheet strategy, may further ease mortgage rates. Currently, mortgage rates are at their lowest point this year, and even a slight decline could improve affordability and stimulate housing demand, according to First American senior economist Sam Williamson. Full story from HOUSINGWIRE →
- Why this Matters: Lower benchmark rates typically lead to reduced borrowing costs across the financial system. Most notably, mortgage rates have already declined to their lowest levels of the year, and further easing could enhance home affordability. This is particularly beneficial for prospective homebuyers, as lower rates translate into more manageable monthly payments and increased purchasing power. Additionally, rate cuts can reduce interest expenses on other forms of consumer debt, such as auto loans, credit cards, and personal loans, freeing up household budgets and supporting broader consumer spending. Looking ahead, if the Federal Reserve cuts rates again in December, consumers may see continued relief in borrowing costs, potentially reinvigorating housing demand and improving overall financial conditions. The federal funds rate cut lower interest rates on acquisition, development and construction (AD&C) loans, the key financing for private builders who deliver over 60% of single-family homes.
LOWEST MORTGAGE RATES IN OVER A YEAR IN OCTOBER. Mortgage rates declined in October, reaching their lowest levels in over a year. According to Freddie Mac, the average 30-year fixed-rate mortgage fell to 6.25%, down 10-basis points from September and 17 basis points year-over-year. The 15-year fixed rate edged down by 1-basis point to 5.49%, marking an 11-basis point annual decline. The 10-year Treasury yield averaged 4.09% in October, a 5-basis point drop from the prior month. Markets had already priced in expectations of a Federal Reserve rate cut, resulting in minimal movement following the Fed’s reduction on Wednesday. Full story from EYEONHOUSING →
- Why this Matters: For prospective buyers, lower rates can enhance affordability, increase borrowing capacity, and open access to previously unattainable markets, potentially reactivating demand. More broadly, reduced borrowing costs can stimulate housing market activity, contributing to increased inventory, competitive pricing, and stronger demand. Overall, the easing of mortgage rates offers financial relief and expanded options for consumers navigating today’s housing landscape.
PENDING HOME SALES IN U.S. REMAIN FLAT IN SEPTEMBER. Pending home sales remained flat in September 2025, unchanged from August and down 0.9% year-over-year, according to the National Association of Realtors. Regional performance varied: the Northeast and South posted modest gains, while the Midwest and West experienced declines. NAR Chief Economist Lawrence Yun noted that contract activity matched the second-highest pace of the year, supported by rising inventory levels, now at a five-year high, which offer buyers more choice and negotiating leverage. With mortgage rates trending toward three-year lows, affordability is expected to improve further, potentially driving increased market engagement. Full story from WORLD PROPERTY JOURNAL →
- Why this Matters: Stable pending home sales signal resilience in housing demand despite broader economic uncertainty. Regional variations suggest that local dynamics may present favorable conditions depending on geography. The rise in inventory increases buyer choice and creates room for price negotiation, potentially easing affordability pressures. Coupled with mortgage rates trending toward three-year lows, consumers may find improved access to financing and more competitive pricing, making this an opportune time to engage in the market.
THE BOTTOM LINE: The Federal Reserve’s second rate cut this fall has lowered the federal funds rate to a three-year low, reinforcing a more accommodative stance amid economic uncertainty. Mortgage rates have followed suit, reaching their lowest levels in over a year and improving affordability for buyers. With inventory at a five-year high, consumers now have greater negotiating power and expanded financing options. Real estate professionals should anticipate renewed market activity, especially if another rate cut occurs in December. Regional disparities in pending home sales highlight the need for localized strategies, while steady national performance signals continued resilience. These conditions present a timely opportunity for strategic engagement and client outreach heading into year-end.
