The Federal Reserve’s decision to lower its funds rate by 25 basis points last month sparked some relief and fresh hopes of a brighter borrowing outlook. But rising foreclosures have prompted industry leaders to question whether the central bank’s anticipated rate cuts will provide any real relief for the real estate market.
Glen Weinberg, managing partner at Fairview Commercial Lending, cautioned that the link between Fed policy and mortgage rates is often misunderstood.
“There’s this market perception that the Fed controls mortgage rates. The Fed does not control mortgage rates. The Fed merely sets short term rates. The market controls longer rates. So I think it’s really important to have that distinction, because when we saw before in the last meeting, the Fed cut rates, and yet mortgage rates didn’t really move much,” he told Mortgage Professional America.
Sun West’s CEO Pavan Agarwal warns that without clear Fed action on QE, predictions are a “complete crap shoot,” and brokers shouldn’t stall good refinance opportunities in hopes of lower rates.https://t.co/xEylZHpHTE
— Mortgage Professional America Magazine (@MPAMagazineUS) September 22, 2025
Weinberg pointed to inflationary pressures, deficit spending, and other macroeconomic factors as reasons why mortgage rates have remained stubbornly high. Weinberg added that even with gradual rate cuts, mortgage rates are likely to remain elevated.
“My personal opinion is that the Federal Reserve is going to gradually cut rates, but we’re going to see mortgage rates kind of kick around in that 6.5% to 7.25% range through the end of the year. I don’t see a huge movement in rates – which is also going to impact foreclosures because the market has this perception that the Federal Reserve is going to bail real estate out, and the Federal Reserve can’t.