Will Interest Rates Go Down in September 2025?
As a Realtor in St. Petersburg, Florida, I hear this question nearly every day: Will Interest Rates Go Down in September 2025? Buyers, sellers, and investors are all paying close attention to the Federal Reserve’s upcoming meetings and the signals being sent by economists, politicians, and financial analysts.
While there’s no crystal ball for the economy, let’s break down what’s happening, what experts are saying, and how it all impacts our housing market here in sunny St. Petersburg.
The Current State of Interest Rates
As of the last Federal Reserve meeting in July 2025, rates have been held steady at 4.25% to 4.5%. For many homebuyers, this feels like a high barrier compared to just a few years ago when we saw historically low rates.
However, there is cautious optimism. The Federal Reserve’s next meeting is set for September 16–17, 2025, followed by another on October 28–29, 2025. That September meeting is the one many are watching closely.
Aaron Hunt, Broker at Avalon Group Realty, told me:
“The big question clients keep asking is, Will Interest Rates Be Lowered? What I remind them is that decisions are based on the economy’s real-time performance. Inflation has cooled, and employment numbers have steadied. That combination gives us hope that September could bring some relief.”
Will Interest Rates Go Down in September 2025?
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The Current State of Interest Rates
As of the last Federal Reserve meeting in July 2025, rates have been held steady at 4.25% to 4.5%. For many homebuyers, this feels like a high barrier compared to just a few years ago when we saw historically low rates.
On the mortgage side, today’s borrowing costs reflect that cautious stance:
30-Year Fixed Rate: Approximately 6.3% to 6.5%
15-Year Fixed Rate: Around 5.7% to 5.8%
As of Monday, September 15, 2025, the national average mortgage rate for a 30-year fixed loan is about 6.53%according to Bankrate, while Bank of America lists a similar rate of 6.25%. These averages serve as a benchmark, but individual borrowers may see higher or lower offers depending on their financial profile.
Factors Influencing Your Rate
Loan Type: Fixed-rate mortgages, ARMs (Adjustable-Rate Mortgages), FHA, and VA loans all carry slightly different rate structures.
Location: Rates can vary by state and even region, with local demand and lender competition playing a role.
Credit Score: Higher scores unlock lower rates, while weaker credit histories lead to higher borrowing costs.
Loan-to-Value Ratio: The more you put down, the better your interest rate potential. A large down payment signals lower risk to the lender.
Aaron Hunt, Broker at Avalon Group Realty, told me:
“The big question clients keep asking is, Will Interest Rates Be Lowered? What I remind them is that while national averages tell the story of where we are now, individual borrowers often have more control than they think. Improving credit, shopping lenders, or adjusting loan terms can make a real difference.”
Why September 2025 Matters for the Housing Market
Timing of the FOMC Meeting
The Federal Open Market Committee (FOMC) meets eight times a year. Each meeting presents an opportunity to adjust interest rates. The September 2025 meeting comes at a critical time as both inflation data and labor market trends are pointing toward stabilization.
Political Pressure
President Trump has been vocal about wanting a “big cut.” He recently said:
“Housing, because of the Fed, is not what it should be.”
This direct pressure is unusual and places the Federal Reserve in a difficult spot—balancing independence with the nation’s economic needs.
Factors Influencing the Fed’s Decision
When asking Will Interest Rates Go Down in September 2025?, we need to consider the main drivers:
Inflation: Recent reports show inflation has cooled to 2% or below over the last four months, signaling the Fed has more flexibility.
Labor Market: While strong, there are signs of softening. Economists argue this justifies a cut to encourage growth.
Consumer Confidence: With energy and grocery prices down, households are feeling some relief.
Political Climate: Trump’s repeated criticism of Chairman Powell has added tension, though historically the Fed acts independently. He does have a point in that all the economic factors have indicated a need to drop rates for many months.
Pam Amante, a Realtor with Avalon Group Realty, added:
“We’ve seen buyers pause because of rate uncertainty. But if rates dip in September, I expect a surge of activity. St. Petersburg Home Buyers are ready—they’re just waiting for the green light.”
Criticism of the Federal Reserve
Many critics argue the Fed has dragged its feet. Some even suggest darker motives, believing the Fed is intentionally harming the Trump economy.
Economic constitutionalists take it a step further, saying:
The Federal Reserve, as a private institution, does not always act in the best interest of the American people.
Its long history of printing money has devalued the dollar.
They argue the Treasury should oversee monetary policy instead.
While these critiques are controversial, one fact is clear: the Fed’s choices impact housing affordability in a very real way.
What It Means for St. Petersburg Home Sellers
If you’re a St. Petersburg Home Seller, lower interest rates could be the catalyst for multiple offers and faster sales. Buyers who’ve been sitting on the sidelines due to affordability issues may re-enter the market with enthusiasm.
Aaron Hunt explained:
“When people ask me, Will Interest Rates Go Down in September 2025?, I tell them—prepare as if they will. Sellers can benefit by listing just before or right after a potential cut, when buyer activity spikes.”
What It Means for St. Petersburg Home Buyers
For St. Petersburg Home Buyers, even a quarter-point reduction could mean significant monthly savings. Over the life of a loan, the impact is even greater.
Pam Amante put it simply:
“A small drop in rates often makes the difference between renting and buying. Families who thought they couldn’t afford a home may suddenly qualify.”
Federal Reserve Expected To Lower Interest Rates: What Experts Say
Some economists are now confident the Federal Reserve Expected To Lower Interest Rates at the September meeting, or at the very least signal that cuts are coming soon.
Others caution that the Fed may want to wait until October to see another round of inflation data.
Regardless, the trend is clear—pressure is mounting, and the likelihood of cuts in 2025 is higher than in previous years.
The Local Market Outlook: St. Petersburg Is Still Strong
Even with higher rates, St. Petersburg remains one of the most desirable real estate markets in Florida. Why?
Beaches and Lifestyle: Few places in the U.S. combine affordability, sunshine, and cultural amenities like St. Pete.
Steady Demand: Buyers from across the country are moving here for tax advantages, weather, and lifestyle.
Limited Inventory: Low housing supply continues to support prices, even when borrowing costs rise.
Key Takeaways for Buyers and Sellers
Rates may or may not go down in September—but preparation is key.
Sellers should consider listing now to capture momentum.
Buyers should get pre-approved and be ready to act quickly if rates fall.
Bullet Summary: What You Need to Know
The Fed’s next key meeting: September 16–17, 2025
Inflation has cooled, giving the Fed room to cut
President Trump is pushing for a “big cut”
Housing affordability is directly tied to Fed decisions
St. Petersburg remains a strong, resilient market
FAQ: Will Interest Rates Go Down in September 2025?
Q: Will Interest Rates Be Lowered in September?
A: Many economists expect a cut, but the decision will depend on inflation and employment data released just before the meeting.
Q: How would a rate cut impact St. Petersburg Home Sellers?
A: It could trigger more buyer activity and multiple offers, especially for homes under $500,000.
Q: Should buyers wait for September before purchasing?
A: Not necessarily. Inventory is low, and waiting could mean more competition. However, if rates drop, refinancing is always an option.
Q: Is the Federal Reserve Expected To Lower Interest Rates this year?
A: Analysts say yes, with September or October being the most likely meetings for cuts.
Q: Is now still a good time to buy in St. Petersburg?
A: Absolutely. Home values remain strong, and living here offers lifestyle benefits beyond the numbers.
Final Thoughts
So, Will Interest Rates Go Down in September 2025? While nothing is guaranteed, optimism is growing. Inflation has cooled, pressure is mounting, and many signs point toward relief for both buyers and sellers.
As your Realtor in St. Petersburg, I encourage you to stay informed, stay prepared, and stay positive. Real estate here has always been resilient—and with or without a rate cut, St. Pete remains one of the best places in the nation to call home.
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