"Indirect Link to Mortgage Rates: The federal funds rate affects short-term borrowing costs, while long-term fixed mortgage rates are more closely tied to the 10-year Treasury yield and investor expectations of future inflation and economic growth. The recent cut was widely expected and already "priced into" the market, so significant drops in mortgage rates are not anticipated in the immediate future."
"Affordability Challenges Remain: Despite recent easing, average 30-year fixed mortgage rates are still in the 6% range (averaging around 6.19% as of early December 2025). Combined with high home prices, this keeps affordability a major concern for many potential buyers. Supply Shortage is the Core Problem: A primary reason for limited relief is the persistent lack of housing supply. Many existing homeowners are reluctant to sell because they are locked into ultra-low mortgage rates from previous years."
The Federal Reserve reduced the federal funds target range to 3.5%–3.75% with a third consecutive 25 basis point cut on December 10, 2025. Long-term fixed mortgage rates are governed more by the 10-year Treasury yield and investor expectations than by the federal funds rate, so the cut is unlikely to produce immediate large declines in mortgage rates. Average 30-year fixed rates remained around 6.19% in early December 2025, keeping affordability strained when combined with high home prices. A persistent shortage of housing supply, driven by homeowners holding ultra-low rates, limits relief and could allow price gains if demand increases.
Read at Boston Condos For Sale Ford Realty
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