Housing Market

The Federal Reserve lowered its benchmark interest rate to its lowest level in three years in an effort to support a cooling labor market. While inflation remains contained, policymakers are divided on whether another rate cut in December is warranted. Mortgage rates have already fallen to a one-year low, but further declines will depend on upcoming economic data and inflation trends.

The September employment report delivered what looked like a mixed message: employers added 119,000 jobs, yet the unemployment rate still edged higher. At first glance, those two trends seem contradictory. But when you break down how the labor market is

The latest U.S. inflation and labor market data reveal a challenging balance for the Federal Reserve. While CPI held steady at 2.7% in July, core inflation accelerated to 3.1%, and producer prices jumped, limiting monetary flexibility. At the same time, weak job gains, rising unemployment, and stalled labor participation are pressuring policymakers toward rate cuts, with major implications for mortgage rates and housing affordability through late 2025.

Despite Fed’s September rate cut and projections for two more in 2025, mortgage rates remain elevated. A softening labor market is further eroding buyer confidence. With affordability stretched and supply still tight, lower rates alone may not be enough to revive housing demand.