Market Optimism Persists Despite Rising Mortgage Rates

Even with interest rates ticking higher, experts remain confident that the U.S. housing market, especially here in South Florida, is headed for a stronger season ahead.

According to data from Zillow, the average 30-year fixed mortgage rate increased slightly to 6.35% at the end of September, following a brief dip earlier in the month. While the Federal Reserve did lower the federal funds rat,by 25 basis points, mortgage rates actually nudged upward afterward, leaving many buyers asking, “Why?”

Why Rates Went Up After the Fed’s Cut

The answer lies in how mortgage rates truly work. The Fed doesn’t directly set mortgage rates; lenders respond to market expectations and long-term bond yields.

Leading up to the Fed’s September meeting, lenders anticipated a rate cut and lowered mortgage rates in advance bringing them down near 6%. Once the announcement confirmed the expected cut, rates began rising again, influenced by the 10-year Treasury bond yield, which tends to be a more accurate gauge for long-term mortgage trends.

Higher Treasury yields usually mean investors feel confident about the economy and are shifting away from “safe-haven” assets like government bonds. That optimism can push mortgage rates back up. It’s one of those ironic financial cycles where strong economic confidence can temporarily keep borrowing costs elevated.

The Market’s Silver Lining

Despite these small rate increases, the real-estate market remains fundamentally strong.
The National Association of Realtors (NAR) reported that existing home sales stayed nearly level from July to August, dipping just 0.2%. Year-over-year, sales were higher in the Midwest and South, including Florida, where continued job growth and in-migration keep demand steady.

Lawrence Yun, NAR’s chief economist, expressed optimism for the months ahead, pointing to declining mortgage rates, more housing inventory, and a record-high stock market as positive drivers for renewed activity. He noted that as more sellers feel confident “trading up,” new listings could create a healthier flow in mid- and upper-price ranges.

What It Means for Buyers and Sellers

While affordability continues to be a challenge, being median home prices still above $400,000 nationally, Florida remains one of the strongest real-estate markets in the country.
Many homeowners are still sitting on record equity and ultra-low mortgage rates, hesitant to move unless there’s a compelling reason. But as rates ease again (and they likely will), we expect more sellers to re-enter the market and more buyers to seize the opportunity before prices rise further.

If you’re a buyer, don’t wait for a big announcement from the Fed before making a move. By the time new policy news hits, lenders have usually adjusted their pricing based on forecasts, not headlines.

And if you’re a seller, this is a window to get ahead of the curve and prepare your property, review pricing strategies, and position it competitively before the next wave of demand arrives.

The Takeaway

Yes, rates are a little higher today, but the outlook for real estate in 2025 remains bright. More inventory, solid economic performance, and continued buyer demand (especially across South Florida) are setting the stage for a strong market rebound.

At Team Kaplan, RE/MAX Select Group, we’re keeping a close pulse on the numbers, the neighborhoods, and the next opportunities. Whether you’re buying, selling, or just exploring your options, we’ll help you make the smartest move in any market.