Rates Reverse: Why More Fed Cuts WON’T Get Us Below 6%

On The Market

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4.8 • 858 Ratings

🗓️ 25 September 2025

⏱️ 32 minutes

🔗️ Recording | iTunes | RSS

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Summary

Fed cut rates for the first time in nine months, yet mortgage rates climbed again, so Dave breaks down why and what happens next for the housing market. He explains that the Fed funds rate mainly moves short-term interest rates, while long-term lending tracks the 10-year Treasury and risk spreads, with inflation risk keeping mortgage rates stubborn. His housing market prediction and forecast: expect mortgage rates to hover in the low to mid sixes through 2025, meaning tight affordability and mostly stable home prices, while commercial real estate could benefit more due to shorter-term debt structures. Takeaways for investors include underwriting deals at today’s rates, tracking inflation and labor data, and preparing for steady transaction gains rather than a rapid drop in interest rates or a surge in housing prices. Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Find an Investor-Friendly Agent in Your Area Find Investor-Friendly Lenders Property Manager Finder Dave's BiggerPockets Profile Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/on-the-market-359 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠advertise@biggerpockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	We just had our first Fed rate cut in nine months a day many investors have been waiting for
0:06.3	for a while.
0:07.5	But in the days since, mortgage rates have climbed back up.
0:11.6	So what gives and what happens from here?
0:14.5	Today, we're diving into the mortgage rate outlook for the rest of 2025 and into
0:19.3	2026.
0:25.5	Thank you. outlook for the rest of 2025 and into 2026. Hey, everyone, welcome to On the Market.
0:28.0	I'm Dave Meyer.
0:28.9	Thank you all so much for being here.
0:30.9	It's great to have you.
0:32.5	Last week, we had a panel show where we talked a little bit about Fed rates, but I wasn't there.
0:39.3	I picked a bad week to take a vacation because I missed Fed Reaction Day.
0:44.7	After nine months of waiting for a Fed rate cut, I was actually out right after that.
0:49.8	And actually, since a lot of things have happened, even since the rate cut a couple of days ago,
0:55.0	I wanted to give you my thoughts on what we've learned over the last week, what happens from
1:00.9	here, or at least what's likely to happen from here, and how both the commercial and the
1:06.5	residential markets might react to this. And spoiler, they will probably react pretty differently.
1:13.7	So that's what we're going to get into today. We're going to start with exactly what happened.
1:18.4	And I will do my best to sort of break down mechanically why rates are going in the direction that they have.
1:25.3	We'll talk about what happens from here. So we'll sort of
1:28.0	build on some of the underlying finance, economic stuff. It's not boring, I promise. It's actually
1:33.3	quite important for real estate investors to understand because this will help you understand
	...

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