📉 Will Mortgage Rates Finally Drop? Here’s What the Fed’s Latest Comments Mean for Michigan Homebuyers
Erik Gascho • July 25, 2025
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Is Relief on the Way? Fed Governor Signals Mortgage Rate Cuts May Be Coming Soon
On July 17, 2025, Federal Reserve Governor Christopher Waller made headlines when he said the Fed could begin cutting interest rates “in the next few months”—if inflation continues cooling.
That’s big news for Clarkston homeowners and Metro Detroit buyers feeling the pinch from today’s higher mortgage rates.
Let’s break it down—without the jargon—and talk about what it really means for your mortgage, your budget, and your decision to buy or refinance a home in Michigan.
💬 What Exactly Did Fed Governor Waller Say?
In a speech at the Peterson Institute for International Economics, Waller stated:
“If inflation continues its downward trend, then I believe the [Federal Open Market Committee] can look to reduce the target range for the federal funds rate in the next several months.”
Translation: If prices stay under control, the Fed may start lowering interest rates before the end of 2025.
Waller emphasized that while inflation hasn’t totally cooled, the data is looking better—and the Fed doesn’t want to wait too long and cause unnecessary pain for consumers or the economy.
📉 How Does This Affect Mortgage Rates?
Here’s where it hits home—literally.
Although the Federal Funds Rate doesn’t directly control mortgage rates, they strongly influence them. When the Fed signals a future rate cut:
Bond markets respond.
Yields on 10-year Treasury notes drop.
Mortgage rates (which follow Treasury yields) tend to move lower.
Since Waller’s speech, we’ve already seen a slight drop in rates, with 30-year fixed mortgage averages falling below 6.6% nationally. In Michigan, we’re seeing some local lenders quoting even lower for well-qualified buyers.
➡️ That means waiting for “the perfect rate” may not be necessary—the opportunity to save is already starting.
🏡 What This Means for Homebuyers in Clarkston & Metro Detroit
If you’re considering buying a home in Clarkston, Waterford, Independence Township, or the greater Oakland County area, here’s what this could mean for you:
✅ Good News:
You might soon qualify for more home—as lower rates improve affordability.
Less competition compared to spring may give you better negotiating power with sellers.
We’re seeing more inventory on the market, giving buyers more options.
⚠️ Caution:
If rates drop too fast, demand could spike again—bringing bidding wars back.
Home prices in Southeast Michigan have held steady, and many areas are still appreciating due to low supply.
The sweet spot may be now—before everyone jumps back in.
🔁 What About Refinancing?
If you bought or refinanced in the last two years and locked in a rate in the 6.5%–7.5% range, you should absolutely be paying attention.
We're starting to see viable refinance scenarios for:
Conventional loans above 6.75%
FHA borrowers with mortgage insurance
Homeowners who want to consolidate debt or eliminate HELOCs
If you’re not sure whether a refinance makes sense, I offer free Total Cost Analysis reviews to run the numbers and show your true savings over time.
🎯 What Should You Do Next?
Whether you're thinking about buying, refinancing, or just trying to time things right—there’s no perfect answer. But there is a smart strategy for every situation.
Here’s what I recommend:
🧭 If You're a First-Time Homebuyer in Michigan:
Lock in a rate now with a lender who offers rate float-downs if rates improve.
Explore down payment assistance and first-time buyer grants available in Michigan.
Talk to a local expert (like me) to map out your numbers clearly.
💸 If You're a Current Homeowner:
Review your current mortgage rate.
Get a personalized refi analysis (not just an online calculator).
Consider whether cash-out refinancing or consolidating other debts is beneficial while home values remain strong.
🤝 Local Guidance You Can Trust
I’m Erik Gascho, a Mortgage Advisor in Clarkston, Michigan with NEO Home Loans, and I specialize in helping Michigan families make smart, financially sound housing decisions.
My job isn’t to “sell you a loan”—it’s to guide you through the market and help you align your mortgage with your long-term goals.
Let’s talk about whether this new Fed news changes your strategy—and how we can make the most of the opportunities ahead.
📅 Let’s Chat
📲 Call or Text: 248-214-8526
📆 Schedule a Call: erikgascho.youcanbook.me
📍 Serving Clarkston, Waterford, Independence Township, Lake Orion, and all of Oakland County
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On July 17, 2025, Federal Reserve Governor Christopher Waller called for an immediate interest rate cut, citing slowing economic momentum and progress on inflation. If you're a homebuyer or homeowner, this could mean lower mortgage rates, better refinance opportunities, and improved affordability in the coming months. 📣 What Did Waller Say? During a speech in New York hosted by the Money Marketeers of NYU, Fed Governor Christopher Waller made headlines by urging a 0.25% rate cut at the upcoming July 29–30 Fed meeting. Here’s what he emphasized: The U.S. economy is losing steam. GDP growth has slowed from late 2024 highs and consumer spending is weakening. Inflation is near the Fed’s 2% goal. Waller noted that core inflation has been tame and short-term price hikes from new tariffs should be temporary. Act now before job growth deteriorates. He warned that waiting too long could allow economic conditions to worsen unnecessarily. This isn't political. While speculation swirls about Waller potentially replacing Jerome Powell as Fed Chair, Waller made clear: “This recommendation is based on data, not politics.” 🔍 Big Picture: Why the Fed’s Split Matters Waller’s stance is not shared by the majority of the Fed’s decision-makers. Most FOMC members favor holding off until September or later, citing concerns about: Lingering inflation risks The impact of tariffs from President Trump’s trade policies Uncertainty about how resilient the labor market really is However, Waller and Fed Governor Michelle Bowman are pushing for faster action—especially given signs of softening in housing, consumer demand, and hiring trends. 🏠 How This Affects You: Homebuyers & Homeowners 1. Mortgage Rates Could Drop Sooner Than Expected A rate cut by the Fed could lower the cost of borrowing, particularly for: Adjustable-rate mortgages (ARMs) Home equity lines of credit (HELOCs) Refinance options for homeowners While fixed mortgage rates aren’t directly tied to Fed policy, they often respond to market expectations, which are now pricing in a cut. 2. Affordability Could Improve for Buyers If rates fall and home price appreciation slows alongside the broader economy, buyers may gain more leverage—especially first-time buyers who’ve been priced out. 3. Time to Revisit Refinance Opportunities If you purchased or refinanced during the high-rate cycle of 2023–2024, now may be a good time to start tracking mortgage rates again. A quarter-point drop could translate into meaningful savings, especially over 30 years. 4. Home Equity May Stabilize Waller downplayed tariff inflation as short-term “noise.” That’s good news for long-term homeowners: if inflation remains anchored, it could support stable home values and equity growth without forcing aggressive rate hikes. 🧭 Final Thoughts Waller’s speech was a strong signal that rate relief could be coming sooner than expected. For buyers on the fence and homeowners with high-interest mortgages, this may be the opportunity to act. Want to know what this means for your unique situation? Let’s connect for a free annual financial review to help you understand your options—whether that’s locking in a better rate, evaluating refinance opportunities, or preparing for your next home purchase. 📅 Book a quick call with me here 📱 Or just text me: 248‑214‑8526
