Weekly Mortgage Rates

September 16, 2025

Labor Over Inflation

August’s CPI showed core inflation held steady at 3.1% annually, not ideal for rates, but the report was overshadowed by a jump in weekly jobless claims to 263,000 for the week (+27,000 from the prior week), the sharpest increase since October 2021. Weekly unemployment claims are the most current indicator of the state of the labor market, especially with the delay in accurate monthly employment data. It was a holiday week, so we’ll watch next week’s release to confirm if this is a trend higher or one off.  

The Fed has made it clear that the main concern now is keeping the labor market stable, more than getting inflation to target. Credit to Logan Mohtashami of Housing Wire for his commentary on labor over inflation.

Fed Day, Finally

Tomorrow ends the Fed (FOMC) meeting where the rate policy and projections will be released. We will immediately see lower rates on credit cards, autos, and home equity lines as these are all shorter-term debts directly impacted by the Fed rate. Relief on these items may also indirectly impact housing as it helps spur economic activity and improves consumer sentiment perhaps encouraging consumers to feel more confident in a home purchase.

Mortgage rates have already priced in the expectation of a .25% rate cut by the Fed and 2-3 more cuts by the Fed are also mostly priced into current mortgage rates, but solidifying the expected future rate cuts could help rates improve some. The real focus at the meeting for our purposes is not the actual rate cut, but the updated economic forecasts and the post-meeting Q&A with Powell. This could sway views on future policy and cause mortgage rates to move.

Fed Strategy

Mortgage rates have improved .50% since Powell’s Jackson Hole speech on August 22^nd, where he signaled a pivot in Fed policy. The 10-year Treasury yield has fallen from 4.33% now down to 4.04% as of this writing. Last week we didn’t see any further improvements in mortgage rates as traders are perhaps on pause ahead of the Fed tomorrow. The pause could also signal that this is the lowest yields can go based on the current economic picture. 

It will take the Fed surprising with a more dovish tone and more rate cuts on the economic projections than currently anticipated to drive mortgage rates lower. If the expectations don’t shift, we won’t see much improvement. 

If a client is wondering about locking now, the risk of rates rising much at the moment seems minimal due to the state of the labor market. But buyers should be aware that things rarely move in a straight line. If we don’t get anything tomorrow to drive rates lower from the Fed, it may be wise to take the gains and lock in.