Fed Rate Cuts + A Buyer’s Market = Your Window of Opportunity
While the Fed is signaling rate cuts in 2025, mortgage rates may not fall much further. The good news? You’re entering one of the strongest buyer’s markets in years—giving you more leverage, more negotiating room, and more opportunities to strike a deal that works for you.
Home Buyers
Rate cuts could bring lower borrowing costs, making monthly payments more manageable. But don’t wait too long, if mortgage rates drop drastically, demand can surge leading to higher home prices. The current buyer's market allow for more control in negotiation.
Home owners
Lower rates may open opportunities to refinance, cutting monthly costs or freeing up cash. With markets like this, timing matters—creativity and options help too. Cash-out, debt consolidation, hybrid ARM, or renovation refinancing could be ways to put money in your pocket as your home appreciates.
investors
Softer rates can fuel price appreciation in real estate assets, strengthening property values and rental demand. Stock equities may pop on rate cuts, but some analysts warn of a “sell-the-news” dip. Diversification between real estate and stocks provides balance.
So, what can you do?
Know Your Goal
Just like mapping out your destination before a ride, know what you want in a home (budget, location, must-haves). Let your agent know so they can better help you.
Stay on Track
Avoid distractions that can steer you off course. A good real estate agent can help with that. Stick to your budget and priorities, the way a rider stays in their lane.
Buy with Control
In real estate, as on a bike, timing and balance matter. Don’t rush into gear too fast, but don’t stall either—manage your pace so you can seize opportunities without crashing.
Over the past few years, we’ve seen just how closely interest rates and home prices are connected. When mortgage rates dropped to historic lows in 2020–2021, California’s housing market surged — with values jumping 25–30% statewide and in some pockets climbing as much as 70%. Even as rates later rose, the market didn’t collapse. Instead, prices have only eased slightly, down roughly 1–3% in the past year, with certain areas remaining remarkably resilient.
Chad’s thoughts
Here’s why timing matters:
California property taxes are roughly 1.25% of the purchase price. That means if prices go up 10-20% before you buy, you’re paying that much more in taxes every year for the life of the home.
MY STRATEGY:
Get in now while values are still relatively stable.
Yes, today’s interest rates might feel a bit higher, but the momentum points to more cuts in November and December. Lenders are already quoting in the 5%s, and by early next year we could be looking at low 5%s or even high 4%s.
That means you buy the home before values run up, lock in your lower purchase price and lower tax base, then refinance later to capture a better rate.
Over 30 years, that could save you a lot.
In racing terms: get the holeshot off the start — clean track, lower cost now — then adjust your speed as the race progresses. Waiting until everyone is lined up just costs you more.
That’s how I see it, and how I’d play this market shift if I were making a move today.