What the Fed’s Expected Rate Cut Means for 2025 Buyers and Sellers

By Nick Waldner

Nick started and leads the #1 KW Team in all of Maryland and DC, selling over 400 homes a year! With 20+ years in the industry, he is the leading expert in Maryland!

Are lower interest rates really on the way, and what will that mean for buyers and sellers? With Jerome Powell set to speak on September 17th, the market is watching closely. But what most people expect may not be what actually happens with mortgage rates. Here’s what to expect and how it could affect your next move.

The Fed’s next move. Jerome Powell, Chair of the Federal Reserve of the United States, is expected to lower the Fed funds rate by a quarter of a point. While that sounds like good news for buyers, it’s important to understand how this actually works.

The Fed funds rate is not the same thing as mortgage rates. Banks and economists already anticipate the cut, so mortgage rates have already shifted in response. In fact, rates are about a quarter percent lower today than they were just a month ago.

What does that mean for buyers? A small change in rates makes a noticeable difference in monthly payments. On a $400,000 loan, today’s lower rates save buyers roughly $70 per month compared to just a few weeks ago. Those savings are pulling more buyers off the fence and back into the market.

If you’re a buyer, now is the time to act. Waiting until after September 17th may mean competing with a flood of new buyers once confidence spreads. More competition could push prices up, even if rates inch down further.

Why should sellers pay attention? The return of buyers creates an opportunity for sellers. Increased showings and offers can translate into stronger sales prices. Acting quickly ensures you connect with motivated buyers before the market grows more competitive.

Don’t expect immediate mortgage rate drops. It’s worth noting that when Powell announces the expected cut, mortgage rates likely won’t drop the same day. In fact, rates usually tick up slightly or fluctuate for two to three weeks following a Fed announcement. Only after that period do they typically settle lower.

Economists expect more than one rate cut over the coming months. That means mortgage rates may continue to improve over the next year, creating opportunities for both buyers and sellers. If you need help understanding how today’s rate changes affect your plans, reach out at (410) 505-8268 or Nick@WaldnerWintersTeam.com. I’m here to keep you informed.