By Jonathan Bodeen · 22 September 2025
If you’re scratching your head wondering if you’ve missed the golden moment for super-low mortgage rates, you’re not alone. Recently, rates shot up to two-week highs just after the Fed cut its rate on September 20th. Many were expecting the opposite.
But here’s the open secret, the Fed’s rate isn’t actually the puppet master of your mortgage rate.
Here’s the scoop: The Fed Funds Rate (FFR) changes only a handful of times a year, usually during big powwows where they decide the direction of the economy. Mortgage rates? They’re dancing to a different tune, primarily driven by the bond market, especially the yields on 10-year U.S. Treasuries, which change almost every minute based on what investors are feeling and fearing.
Why the disconnect? Because mortgage rates are more reactive than the Fed’s scheduled rate changes. So, even if the Fed said “cut,” mortgage rates might not get the message right away if bond yields are doing their own thing.
The recent drama: After the Fed’s rate cut, mortgage rates didn’t drop—they hopped back up to two-week highs. Why? Because bond yields, which influence mortgage costs, had already been moving in flocks.
The bottom line: Mortgage rates and the Fed’s rate have their own dance moves. Headlines saying “rates are lower” often come from weekly surveys that average out several days’ worth of rates—not the real-time snapshot. Today, the actual mortgage rates are higher than the averages from last week.
Good news: While the recent sprint upward might feel like an obstacle, the truth is, mortgage rates are still way below the peaks we saw last year. So, if you hesitated, don’t fret—rates are still a good deal historically.