The anticipated 0.25 rate decrease by the Federal Reserve was largely built into mortgage rates over the past 60 days, although expectations for future decreases provide a little bit of hope for sellers. Property owners who anticipated an immediate surge of buyers, however, are disappointed. Instead of a huge uptick in activity, what we are seeing is more a matter of seasonality: People returning to the Valley after spending the hot months elsewhere.
We remain in a period of high inventory relative to demand, which means sellers need to incentivize deals to make things happen. That can come most often in the form of buying down a buyer’s interest rate, offering some form of credit so that the buyer can negotiate their own buydown, or providing other credits for home improvements. Sellers need to get with the program and give buyers a reason to purchase—or the market is likely to pass them by.
From August to September 2025, the overall supply-demand index increased from 77.5 to 81.7, with a slight decrease in supply and increase in demand. It’s been a month of weak jobs reports and an uptick in the unemployment rate to 4.3%. In addition to reducing the Fed Funds Rate, the Fed also announced that they will continue to reduce their securities holdings—the equivalent of putting one foot on the gas and the other foot on the brake. Demand had already started to improve when rates dropped to 6.5% in August. If mortgage rates remain stable below 6.5%, then purchase demand could continue improving.
You can read all the details in the R.O.I. Properties “Real State – Residential” newsletter, with additional statistics, market trends and information, but here’s a quick peek at the highlights:
Originally shared via roiproperties.com newsletter. Click here to read full newsletter.
