​​First Fed Rate Cut Since 2024 as Housing Market Shifts

The big news this week is that the Fed cut its federal funds rate for the first time since December 2024 as the committee judged that risks to the "full employment" side of the mandate have risen. 

Federal Reserve's policymakers voted to cut the central bank's benchmark interest rate by a quarter of a percentage point, down to a range of 4% to 4.25%.

Mortgage rates had already declined and this week continued the trend, falling to 6.26%. This may mark a low point for mortgage rates, however, as the 10-year yield has edged higher since the Fed’s meeting. Before the meeting, investors had high expectations for a rapid series of Fed cuts but the Fed’s economic projections suggest a slower path of cuts may be more likely.

Weekly housing data show little change in recent trends. Home prices continue to track roughly in line with last year’s prices. Growth in active listings is still positive, but slowing. One bright spot this week was a modest uptick in newly listed homes. Newly listed homes mean fresh options for buyers and are an important precursor to home sales.

Even as weekly prices have flatlined, Realtor.com® analysis of Fed data show that total home value reached a new record in the second quarter, bringing the value of home owner equity—or home value minus debt—to a new high of $35.8 trillion. The fact that homeowners have so much equity helps their financial position and gives them options if they want to sell, even in a market where balance is tilting toward buyers.

The shifting market balance and construction cost headwinds prompted a pullback in August housing starts and permits. Completions ticked higher, especially for single-family homes, which should mean greater availability of move-in-ready new homes for buyers.

This increase in new homes comes as Realtor.com completed a deep dive on the promotions builders are offering to incentivize buyers. The report found that among the five types of deals advertised, reduced mortgage rates are the most widely offered. In addition to this research, Realtor.com launched Realtor.com/Days of Deals to make it easier for consumers to find and take advantage of these deals.

As fall approaches, homebuyers can find incentives from builders and also typically find that existing home sellers are more willing to negotiate. In fact, the 2025 Best Time To Buy report identifies October 12-18 as the best week of the year to look for a home for its still-abundant options, more flexible sellers, and generally lower pricing. 

In addition to seasonal momentum, many buyers are also benefiting from a market momentum shift in their favor. We explore this in a deep dive on the 4 major Florida metros where the housing market is back in buyer’s market territory. 

Miami, Orlando, Jacksonville, and Tampa are the Florida cities considered buyer’s markets. Austin, TX, New York, and Riverside, CA, round out the list.

Finally, the Realtor.com August Rental Trends report shows that August marked the 25th straight month of year-over-year rent declines for 0-2 bedroom properties.

The median asking rent in the 50 largest metros is $1,713—that's $46 (-2.6%) lower than its peak in August 2022, but three metros are seeing the biggest price cuts.

Rents in Las Vegas (-13.6%), Atlanta (-13.6%), and Austin (-13.4%), are seeing the largest price cuts from their peaks, highlighting prime opportunities in these markets.