Market Pulse - Real Estate & Mortgage Update 11/5/25
As we head into the final stretch of the year, mortgage rates are giving both homebuyers and sellers something to watch closely. Here’s a brief look at where things stand and what recent developments mean for the housing market.
Fed “Lowering the Bar” & Market Reaction
The average 30-year fixed mortgage rate recently dropped to 6.13% earlier this week, marking the third consecutive weekly decline and its lowest level in over a year and tying for its lowest level in over three years.
It was widely reported in the media that the Federal Reserve dropped the Fed Funds rate (the rate banks charge each other for overnight loans) by one-quarter point (0.25%). This was Fed’s second drop in rates in 2025.
Contrary to what most people think, mortgage rates don’t move in perfect lockstep with the Fed’s policy rate. In fact, for more than a year now, each time the Fed has lowered the Fed Funds rate, mortgage rates have jumped sharply.
Many times when investors are confident that the Fed will lower rates on a specific date, the lower rate is “priced in” to mortgage rates ahead of the Fed actually lowering the rate. So it’s usually best to lock in a rate in the days just before the Fed meets about rates, since almost always mortgage rates go up when the Fed lowers its rate.
What It Means for Homebuyers & Sellers
For buyers:
Lower rates mean increased buying power. Even a small change in rate can shift your monthly payment significantly on a typical mortgage.
With rates descending and forecasts anticipating possible additional cuts, now may be a favorable time to lock in financing—especially before year end.
For sellers:
Easier financing helps attract more qualified buyers, potentially easing some of the demand constraints seen at higher borrowing costs.
Nevertheless, affordability is still tight: many buyers remain rate-sensitive, and many sellers are pricing their homes at the top of the market.
For refinancers:
The incentive to refinance depends heavily on how much lower your new rate would be compared to your current one—especially after closing costs.
Many homeowners already locked in sub-6% loans, so unless you’re significantly above that, the math needs to work in your favor.
In an environment where most experts believe mortgage rates will continue to head lower, slowly, you should look to refinance once your payback period is between 6-8 months.
Some borrowers, based on their zip code, can refinance at a streamlined rate of under $2000. If you don’t live in one of these lucky zip codes, the cost to refinance will likely run you closer to $3000-$4000, depending on your loan amount.
