Federal Reserve Chair Jerome Powell hinted at cutting interest rates to boost home sales and construction. During a speech at the Jackson Hole Economic Symposium, Powell suggested that the board is ready to start reducing short-term rates. This news sent mortgage rates plummeting on Friday, with major real estate stocks jumping 5-10% in early-afternoon trading.
As a result, the 30-year fixed mortgage rate fell to 6.55%, down from 6.62% the previous day. Experts predict that this reduction will keep interest rates near current lows for at least the short term. In the long run, more balanced employment and inflation data could reduce anxiety in the market, making it easier for buyers and sellers to participate.
This news is particularly welcome for home builders, who have been struggling with high costs and sluggish demand. Powell’s comments also suggested that tariffs are not causing persistent inflation, which means prices will decrease as trade tensions ease. With these developments, even modest interest rate reductions could revive buyer interest and offer a much-needed boost to the construction industry heading into fall.
Source: https://www.realestatenews.com/2025/08/22/mortgage-rates-fall-real-estate-stocks-jump-after-fed-speech