Are Interest Rates Coming Down in September 2025?

As we move toward the final quarter of 2025, all eyes are on the Federal Reserve. Buyers, sellers, and real estate professionals alike are watching closely for one big question:

Are interest rates going to drop in September?

Whether you're looking to buy, sell, or simply stay informed, this blog will help you understand what a potential rate cut could mean for the real estate market—and your next move.

📉 What’s Going On With Interest Rates?

As of August 2025, most signs point toward a likely interest rate cut in September. According to a recent Reuters poll, 61% of economists now expect the Federal Reserve to cut the federal funds rate by 25 basis points at its September 17 meeting. That would bring the benchmark rate down to 4.00–4.25%, from its current level of 4.25–4.50%.

Investment firms like J.P. Morgan have also updated their forecasts, now predicting up to four rate cuts before the Fed pauses—citing cooling labor markets and easing inflation as major influences.

What’s fueling this shift? A mix of:

• Slower job growth

• Tamed inflation reports

• Increasing pressure from industries tied to borrowing (like housing)

That said, the Fed will continue to be cautious. Any spike in inflation could delay or reduce the number of cuts.

🏠 What It Means for Buyers

A rate cut can feel like a breath of fresh air—especially if you’ve been sitting on the sidelines waiting for better affordability.

Here’s what it could mean if you’re looking to buy:

✅ Improved Affordability

Even a small dip in mortgage rates (think 0.25%–0.50%) can make a meaningful difference in your monthly payments and overall purchasing power.

For example, if you're buying a $450,000 home with 10% down, a 0.50% drop in interest rate could lower your monthly payment by $125–$150 or more.

✅ More Competition Ahead

If rates do drop, expect more buyers to jump back in—especially first-timers. That could lead to increased competition, multiple offers, and less wiggle room on price.

✅ Pre-Approval Timing

If you're pre-approved, it might make sense to revisit your numbers after the rate announcement. A lower rate could push your approval limit higher—or make that dream home more budget-friendly.

🏡 What It Means for Sellers

If you’re planning to sell this fall, a rate cut could be your new best friend.

✅ Larger Buyer Pool

Lower rates often bring more buyers back to the table. That increases your chances of attracting motivated, qualified buyers—especially in the mid-range price points.

✅ Faster Sales

More buyers can lead to faster transactions, fewer days on market, and stronger offers.

✅ Pricing Still Matters

Even with better rates, pricing your home right remains key. Today’s buyers are still cautious, budget-aware, and quick to move on if a home is overpriced.

🧭 What to Watch For in the Coming Weeks

Here are a few key milestones to keep your eye on as we approach the September decision:

• August Jobs Report (due early Sept): If job growth slows further, it strengthens the case for a rate cut.

• August CPI Inflation Data: This is the Fed’s favorite gauge of inflation. A lower number makes a rate cut more likely.

• Fed Meeting - Sept 17, 2025: This is the big one. Expect mortgage lenders to adjust their rates quickly if the Fed cuts.

💡 So, Should You Wait?

That depends.

• If you’re a buyer and you’ve already found a home you love, don’t wait solely for a rate cut. A minor dip in rates may not outweigh potential price increases or the risk of losing your dream home.

• If you’re a seller, now is a smart time to get ahead of the potential rush. Listing before the market heats up could give you a competitive edge.

✅ Final Thoughts

While there are no guarantees, there’s strong momentum suggesting the Fed will lower rates in September 2025.

Whether you’re buying or selling, staying informed and proactive will put you in the best position. A shift in rates can affect your strategy—but being prepared means you won’t have to scramble when change comes.

Have questions about how this could affect your real estate plans? Let’s talk strategy and timing that works best for your goals.