The Fed cut rates by 0.25% this week, their third consecutive cut, bringing the Federal Funds Rate to 3.50%-3.75% and lowering the Prime Rate to 6.75%. Here's what this means for your home sale:
Buyer affordability improved: Mortgage rates have dropped significantly. Conforming rates began 2025 at over 7% and are ending at 6.22%, a drop of more than ¾ of a percent. This means buyers have meaningfully better purchasing power than they did earlier this year.
Broader market impact: If your potential buyers have HELOCs, their rates just dropped by 0.25%, freeing up cash flow. Credit card rates also decreased, which can help buyers improve their debt-to-income ratios and qualify for larger loans.
What to expect in 2026:
The Fed has signaled a cautious "wait and see" approach. Rates are expected to remain stable around 6-6.22% throughout next year, good for buyers but not dramatically lower than today.
Your opportunity:
This is a strategic window. Rates are the most favorable they've been all year, motivating buyers who've been waiting. With inventory typically increasing in spring, now through early 2026 could be your sweet spot.
Thinking about selling? Let's talk strategy.
Wendy Leung, Compass, DRE 02223900, [email protected], WendyInTheBay.com
Posted on December 12, 2025
