Mortgage rates aren’t budging during the shutdown. How long will it last?

The story of the 2025 housing market hasn’t been as positive as many industry professionals would like, but the last three months of the year could serve as a warm blanket to an otherwise chilly environment.

On Tuesday, HousingWire’s Mortgage Rates Center showed that 30-year conforming loan rates averaged 6.38%, unchanged from a week ago. Rates for jumbo loans were down 3 basis points to 6.26% and rates for 30-year loans through the Federal Housing Administration (FHA) were unchanged at 6.20%.

Roughly two weeks after the federal government shutdown, mortgage rates have yet to be impacted, but that’s not expected to last indefinitely.

Melissa Cohn, regional vice president for William Raveis Mortgage, said that the shutdown is impacting housing professionals through a “data void.” The U.S. Bureau of Labor Statistics, for example, didn’t release employment numbers for September, and that’s expected to create decision-making hurdles for Federal Reserve monetary policymakers when they meet again later this month.

“As much as the current administration would like to see interest rates much lower, they have to understand that some of the ramifications of their actions could actually cause rates to go up,” she says.

CBS News reported Tuesday that the Senate will vote Tuesday on a House-approved funding proposal. It’s the eighth vote since the shutdown began Oct. 1, with many Democrats refusing to join Republicans in reopening the government as they push for an extension of health insurance tax credits.

In written commentary released last week, Samir Dedhia, CEO of One Real Mortgage, indicated that there’s prime opportunity for consumers who’ve been on the fence about purchasing a home.

“This is now the third time in the last five weeks we’ve seen rates settle near their lowest levels in a year, a clear signal that we’re no longer in the volatile rate environment of earlier this year,” Dedhia said following the release of Freddie Mac’s weekly mortgage rates data.

“These steady improvements are beginning to make a meaningful impact on consumer behavior,” he added. “Buyers who had paused their home search due to affordability concerns are showing renewed interest, and the data reflects it. We’re seeing a consistent uptick in purchase activity, as more consumers grow confident that this lower-rate window may last longer than expected.”

Where does the fall housing market stand?

This week’s Housing Market Tracker, powered by HW Data, shows that national for-sale inventory of single-family homes dropped last week but remains 17% higher than one year ago. New listings are also down from their peak in May, although the 64,770 listings this week are up from 62,879 at this time in 2024.

“Regardless of how inventory ends in 2025, this has been the most positive story for housing as supply grew, price growth cooled down, and we have a much healthier housing market,” HousingWire Lead Analyst Logan Mohtashami wrote.

Mohtashami also pointed out “favorable mortgage pricing” due to lower spreads between the 10-year Treasury rate and the 30-year mortgage rate. The trend toward a neutral policy rate should continue, barring any market disruptions.

Conditions are likely to improve in the near future as Fed officials are expected to cut rates in October. According to the CME Group’s FedWatch tool, 97% of interest rate traders believe the federal funds rate will be lowered by 25 bps this month to a range of 3.75% to 4%. And roughly the same percentage are calling for another 25-bps cut in December.

In a speech given last week in Minnesota, Fed Governor Michael Barr said that while he supported last month’s 25-bps cut, he remains concerned about elevated risks to both sides of the Fed’s dual mandate to promote maximum employment and price stability.

“I agree with Chair (Jerome) Powell’s succinct view that there is no risk-free path forward for monetary policy,” Barr said. “While inflation has come down a great deal since 2021, it is still above our 2% target and is now rising. And although several data points indicate that the labor market may be roughly in balance, we also know there has been a sharp drop in job creation since May, which suggests risks to the labor market going forward.

“The most difficult circumstances for making monetary policy decisions are when both mandate variables are at risk.”

Along with increased home purchase activity, Dedhia said that demand for refinances is likely to grow “as homeowners recognize the opportunity to lock in savings, especially those coming off adjustable-rate products or pandemic-era forbearance exits.”

Refinance application activity is 18% higher on a year-over-year basis and refis account for more than 50% of all applications, according to Mortgage Bankers Association data for the week ending Oct. 3.

“While some economic uncertainty remains, what we’re seeing now is a balancing act, as inflation is cooling, the labor market is softening slightly, and the Fed is being more measured in its approach to further rate cuts,” Dedhia said.

“For buyers and homeowners alike, this may be one of the most favorable stretches we’ve had in the past 12 months, and it’s creating an opening for more momentum heading into the fall.”