With the Federal Reserve lowering interest rates by 0.25% on Oct. 29 for the second time in succession, on the back of already falling mortgage rates, the holiday buying season may have come early for real estate investors.
The rate drop comes as there’s a lack of economic data due to the ongoing government shutdown. However, one key piece of information was released that may have proven pivotal in swaying the Fed’s decision. The Consumer Price Index, released by the Labor Department, showed inflation rose at a 3% rate in September—below expectations, given the tariffs that have gone into effect.
Low inflation has enabled Fed chief Jerome Powell to win favor with the government. In doing so, a buying bonanza could be on the cards for homebuyers and investors alike.
Mortgage Rates Have Been Trending Down
Mortgage rates have generally been trending downward throughout 2025, with 30-year mortgage rates in the low-6% range and 10-, 15-, and 20-year rates in the high 5s—a first since the post-pandemic rate hike, according to data from Bankrate and Freddie Mac. Overall, it’s a nearly full percentage-point drop from the 7.04% rate on a 30-year mortgage seen at the top of the year.
“Mortgage rates continued to trend down this week, hitting their lowest level in over a year. This dynamic has kept refinancings high, accounting for more than half of all mortgage activity for the sixth consecutive week,” stated Freddie Mac.
Rate Cuts: The Big Picture
Reductions in the Fed’s federal funds rate often affect short-term borrowing costs, such as credit card rates, more than fixed mortgage rates, which are more closely tied to…