The short answer
Markets are leaning toward a Federal Reserve rate cut at the September 16–17 FOMC meeting, with futures implying roughly 85% odds. Mortgage rates have already eased to recent lows, and fresh inflation data looks softer than earlier this year. That sets up a window for action in the next 30–45 days.
Where things stand today
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FOMC timing: The next policy meeting is September 16–17.
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Cut odds: The CME FedWatch tool shows markets pricing a high probability of a quarter-point cut in September.
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Mortgage rates: Freddie Mac reported the average 30-year fixed at 6.58% on August 14, the lowest since last October.
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Inflation: July CPI rose 2.7% year over year, while core CPI rose 3.1%. Core PCE (the Fed’s preferred gauge) was 2.8% in June, with July numbers due August 29.
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What to watch next: Jerome Powell’s Jackson Hole remarks this week, plus the August 29 PCE release, will shape the tone into the September meeting.
What a September cut could mean for housing
Mortgage rates don’t move in perfect lockstep with the Fed, but easing policy and cooler inflation tend to pull long-term yields lower. We’re already seeing an uptick in mortgage applications and refinance activity as rates dip.
Buyer playbook if rates are drifting down
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Lock with a float-down. Secure today’s rate and keep the option to drop if pricing improves before closing. Ask lenders how much rates must fall to trigger the float-down and what the fee is.
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Target builder incentives. Builders continue to use rate buydowns and closing credits to move inventory. These can put your effective rate in the 5s on select communities.
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Hunt for assumables. FHA and VA loans are often assumable, letting you take over a seller’s low-rate mortgage if you qualify, then bridge the equity gap with cash or a second loan.
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Consider short-term ARMs with a refi plan. In a falling-rate path, some buyers use a 5- or 7-year ARM and refinance if 30-year fixed rates drop further. Verify caps, margins, and worst-case payments with your lender.
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Act quickly on pricing changes. If rates dip another 0.25–0.50%, monthly payments change meaningfully. Have pre-approval and documents ready so you can write clean offers fast.
Seller playbook for a softening rate environment
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Price to capture new demand. A small rate drop expands the buyer pool. Pair a market-correct list price with compelling media and tight disclosures to convert new shoppers.
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Lead with financing hooks. Advertise assumable loan details if applicable, or offer a temporary buydown or closing cost credit instead of a blunt price cut.
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Time your launch. If inflation prints cooler and rates tick down, you may see a bump in showings. Be photo-ready so you can list into the momentum within days.
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Keep appraisal support tight. More demand can mean faster comps. Maintain a live packet of recent nearby sales, updates, and permit docs.
Creative financing moves that have paid off in past cycles
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Assumable mortgages: Buyers who assumed 2–4% FHA/VA loans during 2023–2025 secured immediate monthly savings, and sellers often achieved stronger pricing because of the embedded financing.
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Builder-funded buydowns: Large builders have offered permanent or temporary buydowns to keep payments attractive when rates were elevated. This has been one of the most effective incentives since 2023.
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Float-down locks: Borrowers who locked early and used a float-down captured later rate improvements without losing protection against a spike.
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Refi waves after declines: When rates fell in 2019–2020, refi activity surged and many households lowered payments by significant amounts — proof of the value of buying the right home and planning to refinance if rates move down.
My quick guidance for Austin and North Lake Travis
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Buyers: Get fully underwritten pre-approval, price out a float-down, and let me flag communities offering buydowns or quick-move-in homes.
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Sellers: If your mortgage is assumable, we will feature it prominently. If not, we can price strategically and consider a targeted buydown that nets you more than a blunt price cut.
