What a Fed Rate Cut Could Mean for Mortgage Rates
By Scott Lehr, The Home Owners Listing Team | September 15, 2025
The Federal Reserve is meeting this week, and the buzz is all about whether they’ll cut the Federal Funds Rate. But here’s the real question South Florida buyers and sellers are asking: does that mean mortgage rates in Fort Lauderdale will drop too?
The Fed Doesn’t Directly Control Mortgage Rates
While most economists expect a cut at the September meeting, it’s important to know the Fed doesn’t actually set mortgage rates. Instead, they set the short-term interest rate banks charge each other. That decision influences borrowing across the economy, but mortgage rates move based on what financial markets expect the Fed to do.
According to the CME FedWatch Tool, there’s a 92.4% chance the Fed makes a modest 25-basis-point cut this month. A larger 50-basis-point cut is much less likely at just 7.6%.
Markets Move Before the Fed Does
Here’s the twist — mortgage rates often shift before the Fed acts. That’s because markets try to price in what they believe the Fed will do. This explains why mortgage rates dipped after weaker job reports in August and September, even before the Fed made a move. If the Fed follows through with a smaller cut, that’s likely already priced into today’s mortgage rates.
But if they surprise us with a bigger cut? Mortgage rates could fall even further, giving buyers across Pembroke Pines, Weston, and Oakland Park more breathing room on affordability.
More Cuts Could Be Coming
Looking further ahead, most analysts expect three cuts in total this year. If that happens, mortgage rates could trend lower through late 2025 and into 2026.
“For mortgage rates, investor confidence in a forthcoming rate-cutting cycle could help push borrowing costs lower in the back half of 2025, offering some relief to housing affordability and potentially helping to boost buyer demand and overall market activity.” – Sam Williamson, Senior Economist at First American
Bottom Line for Buyers and Sellers
Mortgage rates won’t mirror Fed cuts instantly or exactly. But if a cutting cycle begins, rates could ease over the next several months. That’s good news if you’ve been on the sidelines waiting to buy or sell.
Even a small rate drop can change monthly payments significantly. If you’re wondering “How much is my Fort Lauderdale home worth?” or considering your next move in South Florida, now’s the time to schedule a free consultation with me.
Contact: Scott Lehr | scott@scottlehrrealtor.com | 954-342-6180
