The Market Just Shifted Again. Here’s What You Need to Know!

Alright everyone — quick market check. The Fed cut rates, inflation barely budged, mortgage rates eased, and now we’ve got a government shutdown thrown into the mix. So what does all that really mean for your buyers, your listings, and your closings? Let’s break down what’s happened over the past month — and what’s coming next. September gave us a little breathing room. For the first time in months, mortgage rates dropped into the low 6’s, hovering around 6.3% to 6.4%. That relief came right after the Federal Reserve cut its fed funds rate by a quarter percent on September 17th — the first move in months toward easier policy. Their message was simple: the economy is cooling, but inflation still needs work. And the bond market reacted fast — 10-year yields dipped, mortgage-backed securities improved, and buyers started trickling back in. We even saw pending home sales jump 4% month over month, which tells us buyers are paying attention when rates move, even a little. Now, here’s what really moved rates: • Inflation: The August CPI report came in at +0.4% month-over-month and about 2.9% year-over-year. The Core PCE — the Fed’s preferred measure — landed at 2.9% as well. That’s progress, but not victory. Prices are easing, just slowly. Keep in mind this is not deflation by any means, but inflation coming down. • Jobs: The August jobs report was a surprise miss — only 22,000 jobs added, way below expectations. That’s a big signal that hiring is slowing down, which the Fed actually wants to see. • Consumer confidence also took a dip, and the New York Fed’s consumer survey showed people are more worried about the job market and expect slightly higher inflation over the next year. When you combine weaker jobs, slower growth, and easing inflation — that’s the recipe for lower rates down the road. But the Fed’s still cautious. They don’t want to cut too quickly and reignite inflation. So what’s happening on the ground? Mortgage demand has actually started to rebound. The Mortgage Bankers Association reported rates hit an 11-month low in early September, and both purchase and refinance applications ticked up. And according to Freddie Mac, last week’s 30-year fixed rate averaged 6.34% — almost a full point lower than earlier this summer. Buyers are re-engaging. We’re not in a boom, but there’s a clear shift in tone — people are back to asking, ‘What can I qualify for?’ instead of ‘Should I even bother?’' Now — lets talk government shutdown. It’s not catastrophic, but it does slow a few things down: • FHA and VA are still open, but with reduced staffing — so expect some processing delays. • USDA loans are the biggest concern — no new guarantees can be issued during the shutdown. If a file already has a conditional commitment, you can still close, but the lender takes on the risk. • IRS and SSA verifications might lag, which means slower underwriting. • Flood insurance under the NFIP program can’t issue new policies while funding is paused — that could stall closings in flood zones. • Conventional loans through Fannie Mae and Freddie Mac are fully operational. So bottom line: most loans will still close, but timelines matter. Agents — this is a good time to pad contracts by a few extra days and double-check flood coverage early. So, where are we headed next? Most forecasts — from Fannie Mae, Freddie, and MBA — show rates hovering in the low-to-mid 6’s for the rest of the year. If inflation keeps cooling and job growth stays weak, we could see rates touch 6.0% or even high 5’s by early 2026. Hopefully! Let’s say some prayers this is true. But remember — stability is just as powerful as a drop. When buyers know what to expect, confidence returns. And confident buyers make offers. So that’s the pulse of the market — steadying rates, cautious optimism, and a few speed bumps with the shutdown. As always, stay sharp, stay informed, and keep moving forward. I’m Bryan Marx with Marx Mortgage Group — see you next month