T
he Fed’s 25‑basis‑point cut on Sept. 17 was anticipated, but the sharp drop in new unemployment claims surprised markets, sparking a week of volatility. Mortgage rates, however, remain near their lowest levels of the year, offering a glimmer of improved affordability by year‑end.

    After falling to 6.13% on Sept. 16, the 30‑year fixed rate climbed to 6.37% on Sept. 18, according to Mortgage News Daily. Investors had already priced in the Fed move, so the subsequent rise reflected fresh labor‑market data that contradicted expectations of a softening economy. The stronger‑than‑expected unemployment report could slow future rate cuts if inflation resurges, echoing the pause the Fed made last year when inflation spiked.

    Despite the uptick, rates are still near the year’s low. Freddie Mac’s weekly report shows an average 30‑year rate of 6.26% and a 15‑year rate of 5.41%. The low rates have spurred a surge in refinance applications and modest growth in purchase applications. Lisa Sturtevant, chief economist at Bright MLS, notes that while lower rates help, affordability remains a barrier. “We’ll need both lower rates and slower or falling home‑price growth to unlock the market,” she says.

    Redfin data reveal a 2.2% year‑over‑year price increase in the four weeks ending Sept. 14, the largest rise in five months, as new listings have slowed. Yet the rise may be temporary. Mike Simonsen, chief economist at Compass, warns that “shadow inventory” could build—sellers who have pulled listings or are waiting to act may re‑enter the market if rates fall further and demand picks up, potentially pushing prices below last year’s levels by December.

    In short, the Fed’s cut and the unexpected unemployment dip have left rates near historic lows, fueling refinancing but not yet fully unlocking buyer demand. Affordability challenges and the possibility of a price correction remain key uncertainties as the market heads toward year‑end.