Mortgage Rates This Week – September 18, 2025

Mortgage rates increased yesterday after hitting their lowest levels of the year before the Fed announced a .25% rate cut. Immediately following the release of the Fed’s announcement, rates moved lower; however, the improvement was brief as rates reversed and moved higher as Fed Chair Powell spoke at his press conference. The 30-year fixed mortgage rate at the time of this post is 5.500%, 5.710% APR with 2.145points; or 6.125%, 6.138% APR with 0 points for top-tier borrowers putting 25% down with 780+ credit. The 15-year fixed mortgage rate for the same category of borrowers is 4.625%, 4.975% APR with 2.156 points; or 5.500%, 5.521% APR with 0 points.

As expected, the Fed cut rates by 0.25% at its September meeting, a move that was already priced into the bond market. The initial move lower following the rate cut was due to the statement indicating that the Fed expects two more rate cuts later this year and the acknowledgement that the labor market is weakening. However, the move lower was minimal, as the statement also stated that inflation has increased and remains elevated. While the forecast of two more rate cuts this year was more than the markets expected, the Fed reduced the number of forecasted cuts in 2026 to one 0.25% reduction. The big disappointment for the rate markets and the primary cause for rates moving higher was Powell’s comments on the labor market during his press conference, when he indicated that zero job growth doesn’t warrant accommodative action from the Fed due to declining population growth. Many are taking these comments to indicate that the labor market would have to break with significant nationwide job losses before the Fed would shift its restrictive policy.

Now that the long-awaited Fed meeting is behind us, the rate markets will look to economic data. Today, Initial Jobless Claims fell 33,000 to 231,000, which was better than the markets expected and caused the rate to move higher. Continuing claims also improved, falling to 1.92M, down from the recent peak of 1.94 M. To see mortgage rates move much below current levels, we must see continued weak economic data, especially in the labor markets. If the recent trend of weakening data reverses, we could see a repeat of last fall when rates spiked over 1% following the Fed rate cut in September of 2024.

Last week, two big inflation reports were released, showing a mixed bag of data. Cause for concern was the August Consumer Price Index (CPI) showing inflation rising 0.4% for the month and year-over-year inflation rising from 2.7% to 2.9%, both hotter than the markets expected. Higher energy prices rose 0.7% with gas prices up almost 2%. Core inflation, removing volatile food and energy costs, rose 0.3% with year-over-year core inflation up 3.1% matching market expectations.

While consumer inflation was hot, wholesale inflation showed signs of cooling as the Producer Price Index (PPI) fell 0.1% monthly and year-over-year from 3.1% to 2.6%, well below what the markets expected. Core PPI also fell 0.1% last month, with year-over-year core inflation falling from 3.4% to 2.8%. Between the two reports, the markets react more to CPI as that’s the prices consumers are actually paying; however, PPI is seen as a leading indicator of future inflation, although it can be volatile and vary significantly from month to month.

Earlier this month, rates shot lower following weak labor market data. The big move came following an extremely weak BLS jobs report that showed only 22,000 jobs were created in August, well below the 75,000 jobs added that the markets expected. We saw revisions from the prior two months again, with June being lowered from 14,000 to -13,000 and July going from 73,000 to 79,000. Before the BLS report, the ADP Employment Report showed only 54,000 job gains in August, below the 75,000 expected. According to ADP, the three-month average of job gains is now at 46,000 vs. 120,000 over the past year. Employees who stayed at their current jobs saw wage increases decline, rising 4.4% annually from 4.5% last month, and the lowest since June 2021. Additionally, workers are averaging two fewer hours worked per week than before the pandemic, indicating employers are cutting hours instead of laying off workers. While not a good sign for the economy, it can explain why we haven’t seen a dramatic increase in weekly jobless claims over the past few months. While Initial Jobless Claims aren’t spiking higher, they did increase to 237,000 this week, up 8,000 from last week.

The July JOLTS report showed job openings falling by almost 200k to 7.181M, 219,000 openings below estimates. The hiring rate remained extremely low at 3.3%, the second lowest level since 2013, excluding COVID. This reinforces the sentiment that while we’re not seeing mass layoffs, those looking for a job find it challenging.

Late last month, the Fed’s favorite measure of inflation, PCE, came in at expectations rising 0.2% in July, while year-over-year inflation rose 2.6%. The core rate, which removes volatile food and energy costs, rose 0.3% and 2.9% year over year, also in line with expectations. Rates moved slightly higher on the news as it validated what we saw earlier in the month with the CPI and PPI inflation reports. Inflation is rising due to tariffs, but the question remains: Will the rise be temporary, as many, including the Trump Administration, expect?

Fall Buying Season

As we enter fall, demand among home buyers is staying strong, likely due to lower rates compared to the summer and spring. Fully underwritten pre-approvals are crucial for securing offers in this highly competitive market, particularly as interest rates dip.

To get the best possible rate, it is recommended that you compare lenders and work with a firm that provides transparent mortgage rates and associated costs online. At Sammamish Mortgage, knowledgeable and experienced Mortgage Advisors and Loan Officers are available to assist you in navigating the current market landscape and determining the best path ahead.

Current Mortgage Rates This Week for WA, OR, ID, CA, and CO From Sammamish Mortgage
09/18/2025

**Conforming assumptions – $800k Purchase Price, 25% Down, 800+ Credit
**Jumbo assumptions – $1.5MM Purchase Price, 25% Down, 800+ Credit

Washington State mortgage rates

Mortgage rates In Oregon

Mortgage rates in Idaho

Mortgage Rates for Colorado

California Mortgage Rates

National Average Mortgage Rates:

(State-specific rates sourced from Sammamish Mortgage – National Average rates sourced from Zillow)

Consumer Price Index, Consumer Sentiment & Inflation

Without a doubt, the biggest driver of interest rates is inflation. With that in mind, we continue to focus on inflation data and expectations going forward to gauge what we can expect to see interest rates in the coming months. Current inflation is cooling and moving closer to the Fed’s target of 2%. While current inflation numbers would typically warrant a lower Fed Funds Rate, the Fed has indicated that it wants to see the impact of tariffs before moving on to additional rate cuts.

Consumer Price Index (CPI) August= 0.4% – Annual = 2.9%  

Producer Price Index (PPI) August = -0.1% – Annual = 2.6%

Personal Consumption Expenditures (PCE) July = 0.2% – Annual = 2.6% 

Overall, it is difficult to predict what will happen with mortgage rates in the near term. With global economic turmoil, banking issues, inflation, and thus far a far more resilient economy than many expected, trying to predict rates from one day to the next to time a rate lock is almost impossible or at least requires luck. However, looking at a longer time horizon, it’s much easier to see that there is an excellent chance we could see rates move lower from current levels, providing an opportunity for recent and existing buyers to potentially refinance in the future.

See Current Rates

What the Fed rate hike means for borrowers, savers, and investors

When the Federal Reserve raises interest rates, it affects various aspects of the economy, including the housing market, savings, and investment.

For potential homebuyers, a Fed rate hike typically leads to an increase in mortgage rates in the early stages of a tightening cycle; however, if the market thinks the Fed rate increases will hurt the economy and cause inflation to decrease, mortgage rates can improve when the Fed raises the Fed Funds Rate. It’s important to note that the Fed does not control mortgage rates. Fed rate increases do directly impact credit card rates, car loans, and commercial loans, which are shorter in duration than a typical 30-year fixed mortgage.

For savers, a Fed rate hike may lead to higher returns on savings accounts and certificates of deposit (CDs). In addition, banks and other financial institutions may increase the interest rates they pay to savers to remain competitive, which can benefit savers looking to earn more on their savings.

A Fed rate hike may impact the stock and bond markets for investors. Typically, when interest rates rise, the value of stocks and bonds can fall as investors may shift their money to fixed-income investments with higher returns. However, the impact of a rate hike on the markets can be complex and depends on various factors, such as the overall state of the economy, inflation expectations, and global events.

Loan Limits Increased For 2025

Loan limits have increased for 2025. Each county in every state has its loan limit. That said, the new standard conforming loan limit is $806,500, and high balance limits in select high-priced areas can go up as high as $1,037,300 for 1-unit properties in 2024.

Visit our 2025 conforming loan limit pages for Washington State, Oregon, Idaho, California,, and Colorado.

For FHA loan limits for 2025, visit our pages for Washington State, Idaho, Colorado, California and Oregon.

Check out our mortgage loan limit tool for conventional, FHA, and VA loans.

Instant Mortgage Rate Quote

Ready to Apply For a Mortgage?

Do you have questions about rates this week and home loans? Or are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, Colorado & California. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Our programs include the Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. Contact us today with any questions you have about mortgages.

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