Fed Rate Cut December 2025: Impact on Idaho Mortgage Rates

Fed Cuts Rates Again: What the December Decision Means for Boise & Meridian Homebuyers

Breaking News (December 10, 2025): The Fed Rate Cut December 2025 decision has just been announced, with the Federal Reserve lowering the benchmark rate by 0.25%.

This marks the third consecutive rate cut of 2025, bringing the benchmark rate down to a range of 3.50% – 3.75%. While this sounds like great news for homebuyers from Eagle to Nampa, the reaction from mortgage rates might surprise you.

Here is exactly what happened today, why mortgage rates didn’t plummet, and how this impacts the Idaho housing market as we head into 2026.

What the Fed Did Today

The Fed's decision to cut rates by a quarter-point was widely expected. However, the vote wasn’t unanimous. Three members voted against the decision, signaling a divided Federal Reserve.

• The Goal: The Fed is trying to support the job market, which has shown signs of cooling.
• The Concern: Inflation is hovering slightly above 2%, preventing faster cuts.

Why Didn’t Mortgage Rates Drop?

If the Fed cuts rates, mortgage rates should go down, right? Not always. In fact, mortgage rates often rise on days the Fed cuts rates.

Here is why your rate quote in Meridian didn’t drop today:

1. “Priced In”: The market knew this cut was coming weeks ago. Lenders adjusted their rates downward in November. Today was just the confirmation.
2. Future Uncertainty: The Fed signaled they might slow down cuts in 2026. This caution caused the 10-Year Treasury yield (which mortgage rates follow) to hold steady.

🏡 Impact on the Boise & Treasure Valley Market

What does this mean for our local market in Ada and Canyon Counties? Real estate in the Treasure Valley is sensitive to rate changes.

1. Inventory is Tightening
With rates stabilizing in the 6% range, more sellers in Boise and Meridian are listing their homes. However, demand is picking up faster than supply, which keeps prices firm.

2. The “Wait and See” Danger
Many buyers in Nampa and Caldwell are waiting for rates to hit 5%. The danger is that while you wait for a 1% rate drop, home prices might rise by 5-10% this spring. It is often cheaper to buy now and refinance later.

3. Affordability Hacks
Smart local buyers aren’t waiting. They are using programs like:

• Idaho Down Payment Assistance: Get up to 8% to cover your closing costs.
• FHA Loans: Buy with just 3.5% down and a 580 credit score.

The Forecast: Q1 2026 Mortgage Rates

So, where are we heading as we enter the New Year?

Most experts believe we are entering a period of stability. Expect mortgage rates to hover in the low-to-mid 6% range for the first quarter of 2026.

Advice for Idaho Buyers: Volatility is the new normal. If you see a rate dip, lock it. Don’t gamble on tomorrow.

❓ Frequently Asked Questions (Dec 10 Update)

Did mortgage rates drop in Idaho today?

No, not immediately. Since the market anticipated the 0.25% cut, lenders had already adjusted rates. Rates held steady or rose slightly today.

Should I lock my rate now or wait?

If you are closing in December or January, locking now is safer. The market is volatile. Protecting your rate is smarter than gambling on a small drop.

Will home prices in Boise drop in 2026?

Unlikely. With inventory still low and demand increasing as rates stabilize, most forecasts predict modest price appreciation for Ada and Canyon Counties in 2026.