During a tepid year in the housing market, September brought about some of the most significant changes in months. This included the much-anticipated Fed rate cut and the lowest mortgage rates buyers have seen in years. After some fluctuations, rates remain below 6.5%. Yet, only time will tell if rate cuts are enough to jump-start the market.
Low inventory and high prices continue to limit buyer power. However, properties are spending more time on the market, prompting many sellers to cut prices. While change finally seems to be moving in a positive direction, uncertainty is still on the horizon. Potential buyers face the decision to either wait for the benefits of lower rates that may never come or to take advantage of current market conditions.
Mortgage Rates Are On a Downward Trend
On September 17, the Federal Reserve cut the federal funds rate by 25 basis points, marking the first reduction since December 2024. The long-awaited cut was preceded by some of the steepest mortgage rate declines we’ve seen all year, dropping the average rate on a 30-year fixed mortgage to 6.13% ahead of the Fed meeting. However, rates jumped immediately after the cut, rising to 6.71% within a week. By the first week of October, rates were closer to those record lows, with a 30-year fixed-rate mortgage (FMR) standing at 6.34%, and those for a 15-year FMR at 5.55%.
Whether rates will continue to drop is unclear. Although the September rate cut was predicted to be the first in a series of cuts, there’s no guarantee rates will respond to cuts. Forecasters predict a similar scenario for a Fed rate cut in October, suggesting the cut was widely anticipated and “baked into” recent mortgage rate declines. However, other factors (including rising unemployment rates and cooling inflation) could drive the 10-year treasury down, affecting mortgage rates regardless of what happens at the October meeting.
The government shutdown adds another layer of unpredictability. For the time being, the government will cease issuing reports on inflation and the economy. Without such reports, Fed policymakers will have less data to assess economic conditions and make decisions.
Home Inventory Growth Is Slowing
Active property listings for September rose 17% YOY, marking the 23rd consecutive month of gains. However, inventory growth has slowed steadily since May, and national inventory remains 13.9% below pre-pandemic levels. Location remains an important predictor of inventory, as the South and West are above pre-pandemic inventory, while supply in the Northeast and Midwest remains low.
Adding to inventory concerns, September closed with an announcement that the U.S. Commerce Department will impose a 10% tariff on all timber and lumber imports. These tariffs take effect on October 14th, further increasing construction and renovation costs and potentially impacting inventory nationwide.
Seller Price Cuts Are Easing Cost Concerns
National median home prices remain steady at $425,000, but vary by geographic area. Prices dipped 3.6% in the West, but are rising on a per-square-foot basis in the Northeast and Midwest. However, sellers across all regions are turning to price cuts as a way to attract shoppers in a slow market. In September, 19.9% of all for-sale homes across the U.S. showed price reductions. As with other housing trends, seller discounts reflect availability, as 21.1% of listings in the South and 20.9% in the West are discounted, while the Northeast trails behind at 14%.
However, price cuts from motivated sellers aren’t the only way buyers can find affordable homes. Seeking out price differences across states and searching for unique housing opportunities can help buyers stretch their budget. For example, homes in Iowa, Alabama, Louisiana, Oklahoma, and Ohio all have average prices below $300,000. Retirees seeking ways to meet their lifestyle expectations while staying within budget can often find even more affordable options in age-restricted communities.
What 55+ Homebuyers Need to Know in Times of Uncertainty
Unpredictability in the housing market continues to raise questions about how buyers can accurately time the best deal. While there may not be additional mortgage rate decreases, a 32,000 reduction in private sector jobs led to 10-year treasury yields dropping to their lowest level in two weeks, a measure that could lower rates.
Here’s what you should know when considering whether to take advantage of the current housing environment.
Your Credit Score Still Matters
Getting the best rate depends on your risk as a borrower. Your credit score gives lenders insight into your past payment history to determine if you’re likely to default on a mortgage loan. Prospective buyers with a poor credit score won’t have access to the lowest mortgage rates, which could dramatically impact affordability.
The Government Shutdown Could Cause Delays for Some Buyers
While the FHA and VA will continue to approve most single-family mortgage loans during a shutdown, processing delays could occur. Perhaps more importantly, the National Flood Insurance Program (NFIP), which provides over 90% of flood insurance policies across the country, cannot write new policies until a new spending bill is passed. This could delay or disrupt 1,400 home transactions each day.
Comparing Lenders Will Help You Get the Best Deal
While national mortgage rates indicate lower prices overall, the rate you’re offered can vary significantly from one lender to the next. Differences in mortgage rates and terms can add up to thousands of dollars over the life of a loan. Shopping around will allow you to lock in the lowest rate available and protect you against market shifts.
Assistance for 55+ Homebuyers
While rate cuts can make home mortgages more affordable, they don’t guarantee prospective buyers will be ready to handle all the responsibilities that come with a home purchase. Seeking out mortgage assistance programs can help you get more home for your money or stretch your budget to help you get the most out of lower rates. Homebuying programs designed for specific groups are one way eligible buyers can gain access to mortgage assistance. Common programs include:
- Assistance for veterans and service members: The Department of Veterans Affairs (VA) helps veterans, surviving spouses, and service members get home loans. You can find more information about eligibility on the VA Home Loans website.
- Assistance for rural homebuyers: Buyers who live in a rural area may qualify for home loans through the U.S. Department of Agriculture (USDA). Check out the USDA’s single-family housing programs to learn more.
- Assistance for emergency personnel and teachers: Specific professionals, including law enforcement officers, teachers, firefighters, and emergency medical technicians, may be eligible for special discounts through HUD’s Good Neighbor Next Door Sales Program.
Finding Your Dream Home in 2025
While the homebuying process has been challenging in 2025, there are many opportunities for 55+ buyers who are ready to find their dream home. For many, dropping mortgage rates can ease affordability issues, making the final quarter of 2025 an excellent time to buy.
55+ buyers can also gain a distinctive market advantage by considering homes in age-restricted communities. These neighborhoods often include a range of amenities to support a resort-like lifestyle with few maintenance requirements for homeowners. Need help finding the ideal 55+ community? Reach out today to gain access to programs and information about communities designed to meet your lifestyle needs.
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