Mortgage Rates 2025: What Idaho Homebuyers Should Expect After the Fed's September Cut

Introduction

Mortgage rates 2025 are already making waves in Idaho after the Federal Reserve's September cut. When the Fed speaks, homebuyers and homeowners pay attention. This meeting was no exception. Let's take a closer look at what the Fed did, how mortgage rates responded, and where rates may go for the rest of the year.

What the Fed Did in September

On September 17, 2025, the Federal Reserve lowered its target rate by 0.25%, moving it to 4.00% - 4.25%. The Fed made this cut because job growth slowed and inflation still hasn't dropped to the long-term target.

The Fed also signaled it will keep watching new data before making further changes. This means more cuts are possible, but not guaranteed.

How Mortgage Rates Reacted

Many Idaho buyers expected lower mortgage rates right after the cut. But mortgage rates 2025 don't move in lockstep with the Fed. Instead, they follow the 10-year Treasury yield plus a risk margin.

Here's what happened:

• The average 30-year fixed mortgage rate moved to about 6.3% - 6.4% in late September.

• Rates bounced around because bond markets had already priced in the Fed's move.

• Sticky inflation data and shifting job numbers kept pressure on Treasury yields, which pulled mortgage rates higher again.

In short: even with the Fed's cut, mortgage rates 2025 stayed in the low 6% range.

Mortgage Rates 2025 Outlook

So, where are mortgage rates headed next? Let's break it down:

• Base case: Rates hover between 6.0% and 6.4% by the end of 2025.

• Optimistic case: If inflation cools faster, rates could dip to 5.5% - 6.0%.

• Risk case: If inflation remains sticky, rates may climb back to 6.5% - 6.8%.

Most experts, including Fannie Mae, expect mortgage rates 2025 to finish the year in the low-to-mid 6% range.

I lean toward 6.0 - 6.4% as our most likely window by year end, with occasional deviations depending on incoming data. If inflation surprises to the downside and the Fed leans dovish, we could briefly flirt with high 5s, but I'd caution against banking on that as a dominant outcome.

Note: Forecasts are not guarantees. Mortgage rates will continue to respond to:

• Inflation (especially PCE/Core PCE)

• Employment and wage data

• Global economic shocks (e.g. geopolitical, supply chain, sovereign debt issues)

• Federal budgeting and fiscal policies

• Investor demand for longer-dated treasuries

What This Means for Idaho Buyers and Sellers

For buyers: Mortgage rates 2025 are not the 3% levels we saw a few years ago. But today's 6% range is far better than the highs of 2023 - 2024. If you find the right home, locking now could make sense.

Here is our blog on last month home price data, a good read to see where home sales are trending in Ada and Canyon County:  https://375loan.com/ada-canyon-county-housing-market-august-2025/

For sellers: Slightly lower rates may bring more buyers back into the Idaho market. Homes in Boise, Meridian, and Nampa could see stronger demand if rates drift toward 6%.

For refinancers: If your rate is above 6.5%, it may be time to run the numbers. Even a small drop in your rate can free up hundreds of dollars a month.

Idaho Local Impact

Idaho's housing market responds quickly to rate changes. In the Treasure Valley, where affordability is a key issue, even a small dip in mortgage rates can boost buyer activity. Sellers in Nampa, Caldwell, and Kuna may see more traffic if rates settle closer to 6.0%.

In higher-priced areas like Boise and Eagle, buyers still face affordability challenges. But lower rates may help keep the market moving.

Final Thoughts

Mortgage rates 2025 will keep moving with inflation, job growth, and global markets. The Fed may cut again, but don't expect rates to crash. The most likely outcome is stability in the low-to-mid 6% range by year-end.

That's still a solid improvement over recent highs. If you're in Idaho and considering a purchase or refinance, now is the time to prepare.

Call to Action

At 1st Choice Mortgage, we stay on top of every shift in the market. Whether you're buying your first home in Boise or refinancing in Nampa, we'll help you find the best options.

👉 Contact us today to talk about your mortgage plans for 2025.