On Sept. 17, the Federal Reserve voted to cut the federal funds rate by 25 basis points. A basis point is one one-hundredth of a percentage point.

Mortgage lenders anticipated this move; last week, the average 30-year mortgage rate fell below 6.5% for the first time in 2025. “Rates have been trending downward lately, and while we’re not seeing dramatic drops, the momentum is encouraging,” said Chris Lim, chief growth officer at Re/Max Holdings, a global real estate brokerage network.

Why now?

According to the latest Consumer Price Index released on Sept. 11, inflation rose 2.9% year-over-year in August, the highest measure since January. While rising inflation would typically encourage the Federal Reserve to raise rates, a weakening job market has pulled central bankers in the other d

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