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Just In: The Fed Cut Interest Rates—What Does This Mean for Homebuyers?

September 22, 2025

At Norfolk Homes, we know the housing market has been on everyone’s mind. With headlines swirling about interest rates and affordability, buyers are left wondering: Is now the right time to make a move?

This week, the Federal Reserve announced its first rate cut since last year—a quarter-point reduction—with projections of two more cuts later this year. For many, this news brings a glimmer of hope that mortgage rates will keep falling. But what does this really mean for buyers, and more specifically, for those looking at new homes in the Ann Arbor area? Let’s break it down.

What the Rate Cut Means for Mortgage Rates

Mortgage rates don’t always move in lockstep with Fed actions, but they are influenced by expectations. As AP News reported, “Mortgage rates have been mostly falling since late July on expectations of a Fed rate cut. The average rate on a 30-year mortgage was at 6.35% last week, its lowest level in nearly a year.”

That’s welcome news for homebuyers. But history tells us we shouldn’t expect a straight path downward. Last year, after a similar rate cut, mortgage rates dipped briefly before climbing back above 7% by January. Financial analyst Stephen Kates explained: “If the Fed keeps lowering rates, it doesn’t necessarily mean mortgages will go down… they may trend in that direction, even if they don’t move in lockstep.”

Translation: the Fed’s move may create opportunities for slightly better financing, but buyers shouldn’t necessarily wait indefinitely for dramatic changes that may never come.

Why Buying Now Still Makes Sense

Even with the Fed’s cut, affordability is still top of mind for buyers. While rates have eased slightly, they’re not expected to drop below 6% this year. Danielle Hale, chief economist at Realtor.com, recently forecast that 30-year mortgage rates will likely end the year between 6.3% and 6.4%.

So why buy now? A few key reasons:

• Prices aren’t necessarily dropping, so delaying your purchase could mean paying more for the same home later.
• Lower rates could draw more buyers into the market, making new homes in desirable areas like Ann Arbor even more competitive.
• With construction loans, you can lock your rate today and even benefit from a “float down” if rates decrease before closing.Some lenders also offer no-cost refinancing within the first three years.

At Norfolk Homes, we also simplify the process by offering no escalation clauses and no transfer tax, giving you confidence that the price you sign for is the price you’ll pay.

Move-In Ready Homes: Just in Time for the Holidays

If you’re ready to take advantage of today’s market conditions, we have a selection of move-in ready new homes in Ann Arbor that you can close on before the holidays. These homes combine comfort, modern design, and unbeatable locations in Ann Arbor, Saline, Jackson, and beyond.

• 5660 Trail Side Lane #4 – Hamburg Township, MI
  • $454,429 | 1,510 SQFT | 2 Beds | 2 Baths | 2-Car Garage
  • Community: Mystic Ridge
  • Floor Plan: The Esher Paired Ranch Condominium
• 2924 Sheridan Circle – Jackson, MI
  • $469,999 | 1,692 SQFT | 3 Beds | 2.5 Baths | 2-Car Garage
  • Community: Preserve at Magnolia Park
  • Floor Plan: The Eaton
• 2768 Bristol Ridge Drive #33 – Ann Arbor, MI
  • $549,999 | 2,130 SQFT | 3 Beds | 3.5 Baths | 2-Car Garage
  • Community: Bristol Ridge Townhomes
  • Floor Plan: The Highbridge
• 2778 Bristol Ridge Drive #38 – Ann Arbor, MI
  • $617,972 | 2,130 SQFT | 3 Beds | 3.5 Baths | 2-Car Garage
  • Community: Bristol Ridge Townhomes
  • Floor Plan: The Highbridge
• 2781 Bristol Ridge Drive #39 – Ann Arbor, MI
  • $652,571 | 2,582 SQFT | 4 Beds | 3.5 Baths | 1-Car Garage
  • Community: Bristol Ridge Townhomes
  • Floor Plan: The Keswick End Townhome
• 4846 Burton Lane – Saline, MI
  • $799,430 | 2,880 SQFT | 4 Beds | 2.5 Baths | 3-Car Garage
  • Community: Fosdick Glen of Saline
  • Floor Plan: The Georgetown II Side Entry

These are just a few of the many options we have for those searching for new construction homes in Ann Arbor, so be sure to click here for more. 

Act Now

The Fed’s decision to cut rates is encouraging, but it doesn’t guarantee that mortgage rates will fall dramatically—or stay down. What it does mean is that buyers now have a window of opportunity to secure a new home in the Ann Arbor area at today’s pricing, with the added protections and incentives Norfolk Homes offers.

Whether you’re looking for a quick move-in home before the holidays or planning your future in one of our upcoming communities, we’re here to guide you every step of the way. With our Best Rate Guarantee, no transfer taxes, and no escalation clauses, we keep things simple: No stress. Just home. 

Reach out today at (734) 336-1912 or fill out our online form to learn more about our high-quality new construction homes in Ann Arbor.