September 16, 2025
Mortgage rates just took a big step lower—landing at levels we haven’t seen since late 2022. The move outpaced what the bond market alone suggested, thanks to a mix of late-day bond strength yesterday and some quirks in the mortgage-backed securities (MBS) market. In plain English: investor appetite shifted toward lower-rate groupings, making it easier for rates to slide into a more favorable range.
It’s a familiar setup—similar to September 2024 when rates dropped ahead of a Fed meeting that nearly guaranteed a rate cut. But back then, rates actually climbed after the cut, not because of the Fed itself, but due to stronger-than-expected economic data in early October. This time around, the same “surprise factor” could play a role. Tomorrow’s Fed “dot plot” update will be the next big test.
🏦 What Happened Today
Mortgage rates fell sharply, now matching the lowest levels since late 2022. Normally, rates track the bond market closely, but sometimes they move ahead of it. That’s exactly what we saw today, partly due to how MBS are structured. When investors shift toward lower-rate pools, it creates extra momentum for rates to drop into that range.
📅 Lessons From Last Year
We’ve been here before. In September 2024, rates fell for the same technical reasons ahead of a Fed rate cut. Once the cut happened, though, rates rose—not because of the Fed’s action, but because economic data turned unexpectedly strong. The big takeaway? Mortgage rates care less about the Fed’s announcement and more about what the economy does next.
🔮 What’s Next?
Tomorrow brings the Fed’s quarterly “dot plot,” showing each member’s expectations for future rate cuts and hikes. This release has a history of stirring up volatility. After that, the real drivers will be jobs reports, inflation updates, and consumer spending data.
For borrowers, this means today’s good news might stick around—but it’s not guaranteed. Markets can turn quickly if economic data surprises to the upside.
✅ Bottom Line: Rates are at their lowest point since 2022, but the road ahead depends on what the Fed signals tomorrow and how the economy performs in the weeks to come.
