The big news this week is of course the Fed… The Fed lowered its target federal-funds rate and in its Sept. 17, 2025 FOMC statement indicated it expects to carefully assess incoming data while some Fed officials signaled more cuts could follow.
Some mortgage-rate measures fell in the days ahead of the Sept. 17 decision. Many buyers and sellers -- and their agents -- hoped or expected further significant declines.
But mortgage rates (30-year fixed) are most closely benchmarked to long-term Treasury yields—commonly the 10-year Treasury note—and to mortgage-backed security (MBS) yields and spreads, rather than the federal funds rate.
You may have noticed that mortgage rates rose in the days after that Sept. 17 meeting.
But let’s say mortgage rates do end up falling significantly over the next few months… What will that mean for Bay Area real estate?
In San Mateo and Santa Clara counties, our Fall 2025 selling season was already off to a robust start: well-prepared properties in coveted areas are already getting multiple offers and going well over list price.
If long-term rates fall further, it is probable that buyers (and sellers) will come out of the woodwork, driving prices even higher.
One might say that the savvy buyer will buy now, before that happens, refinancing when and if mortgage rates drop further.
Do keep in mind that refinancing involves costs and depends on loan type, credit, home-equity, and future rate moves. Be sure to run the numbers with your lender or CPA to see whether a purchase and future refinance would actually save you money.
Interested in chatting more about prices and inventory in specific towns or your own plans for selling?
Reach out to book an in-person meeting or call. I’m always happy to chat or provide more data when I can.
