Mortgage Rates Jump After Fed Cut Surprises Market

Despite the Federal Reserve’s latest rate cut, mortgage rates climb as uncertainty over future cuts and economic headwinds keep the housing market on edge.

When the Federal Reserve announced a widely anticipated 0.25 percentage point interest rate cut on October 29, 2025, many homebuyers and homeowners hoped for some relief.

The Fed’s move brought its short-term benchmark rate down to a range between 3.75% and 4%, according to USA TODAY.

The explanation, it turns out, lies not in the Fed’s action itself but in the market’s reaction to the central bank’s messaging.

Despite the uptick, mortgage rates are still hovering near their lowest levels of the year.

There are some bright spots. Mortgage purchase applications increased by 5% in the week ending October 24, and overall applications—including those to refinance—rose 7.1%.

All told, the immediate future for mortgage rates and the housing market remains murky.

The Fed’s next moves—and the messages it sends—will be closely watched.