The Fed Cut Interest Rates...So Why Did Mortgage Rates Go Up?
Earlier this month, the Federal Reserve lowered its benchmark lending rate to 4.00%-4.25%. While this resulted in record-high stock market numbers, mortgage lending rates didn't join the celebration.
This is mainly because the 10-year Treasury bond yields increased, as bond investors didn't receive the assurance they were hoping for. Instead, some felt that the Federal Reserve wasn't concentrating as hard on inflation numbers as they should, especially after economic projections from the Fed showed that more inflation was expected for 2026.
However, other investors are waiting for the Federal Reserve to shift its emphasis from fighting inflation to boosting the labor market, especially because of weak employment data released earlier this month. This is why Fed Chair Jerome Powell called Wednesday's rate cut a "risk management" move.
Want to know about today's mortgage interest rates? Call me, or refer your buyers to me for a fast, free loan pre-qualification.1
Why More First-Time Buyers Are Backing Out of Contracts
Even though mortgage interest rates finally began to fall, more potential home buyers are walking away from purchase contracts. While there are several reasons for fall-though sales, the buyer demographics help tell the tale.
Data from Bright MLS, which covers Washington, D.C. and counties in several surrounding states, found that during July 2025, contracts for homes priced over $1 million only saw a 10.8% fall-though. By comparison, the fall-through rate of homes listed at less than $300,000 was nearly twice as high, at 19.3%.
Prospective buyers at the lower end of the market are more likely to back out for financial reasons, as economic conditions have weakened and the job market has become more uncertain.
According to Bright's recent survey of real estate agents, more than half of buyers who backed out of a contract did so because the home inspection raised too many concerns. Another 26.3% backed out when the seller was not willing to provide financial assistance with repairs and/or closing costs.
This means that, if you're working with sellers of lower-priced properties, you'll want to share this intel. This gives them time to consider preparing one or more incentives for serious buyers.2
Increase Your Leads with Email Verification
Have you ever prepared a special email for one of your lists, such as prospects or referral sources, only to have some of them come back to you as undeliverable? It's frustrating, but you can solve this problem by using an email verification tool.
These tools perform three types of checks to ensure that an email address is valid and can receive messages. They verify:
- Syntax, which is the format of the address.
- Domain, which is the email server's configuration.
- Mailbox: If a specific mailbox is active and accepting email.
If you would like assistance with correcting undeliverable and bounced emails, our platform tracks these, making it easy for you to reach out to these contacts for an updated email address. Contact me for assistance with this and other tools.3
The Best Holiday Marketing Campaigns Start Now
Fall is here, which means that some agents begin to wind down their marketing for the year. However, this could mean missed opportunities, both for sales and relationships. And while sales may be slower, they tend to close quickly because clients are motivated and there's less competition.
Instead, think about the campaigns and activities that best suit your territory, and begin to create a holiday marketing schedule.
Create emotional connections. Almost everyone is more sentimental during the holiday season. Personalized holiday postcards, premium items, or a "12 Days of Real Estate Tips" campaign will help you spread cheer with everyone from prospects to referral sources. It's also an ideal time to thank this year's clients for choosing you to assist with a home sale or purchase.
Combine traditional and online messaging. Almost all buyers start their home search online, and the right social media can keep you top of mind with those planning a 2026 property purchase. You can also add mailed greetings or postcards to support your online messages.
Be personal when you can. If you have the time to address holiday cards individually, this will help them be the first item of mail that's opened...and retained.
Look for community partnerships. Collaborate with local businesses to sponsor holiday events, especially charitable ones that require fundraising.4
Good News to Share with Reluctant Buyers
Mortgage rates are down. Helping buyers compare early 2025 interest rates to current ones can be an eye-opener. For example, you can compare current rates for 30-year, fixed-rate loans to the 7% rates recorded during mid-January (according to Freddie Mac data).
Home prices are cooling. After several years of scary property price hikes, national home price growth is down to low single digits. And in some metro areas in the South and West regions, including some Texas and Florida cities, home prices are falling.
Wages are up by almost 4% annually, according to the Bureau of Labor Statistics (BLS). This means that the typical paycheck is rising faster than home prices right now, which helps make buying a little more affordable.5
Sources: 1cnbc.com, 2brightmls.com, 3smartlead.ai, 4blogprospectsplus.com, 5keepingcurrentmatters.com
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