October 28, 2025 – The Fed Meeting

Economic Commentary

The Federal Reserve’s Open Market Committee meets today and tomorrow, and a major topic of discussion will be the economy and whether to lower interest rates. As we discussed this week, the Fed is meeting with a substantial lack of data due to the government shutdown. There are a few reports still being issued, typically by private sources. These include existing home sales, builder confidence and the ADP private payroll report.  But significant data such as the jobs report, retail sales, personal income/spending and more are on hold because of the shutdown.

The government did release the delayed consumer price index on Friday, an exception because this data determines the 2026 cost of living increase for social security. The CPI came in up 0.3% from September and 3.0% higher on an annual basis.  Excluding food and energy, the core CPI came in at 0.2% monthly and 3.0% annually. These figures were less than expected but continue to be higher than the Fed’s target of 2.0% annual inflation. This report is certainly one watched closely by the Fed. This question must follow – how does the Fed make a decision without much of the data which is so important?

Members of the Fed certainly have not been quiet during the shutdown. As usual, the members opinions are all over the board.  Of vital importance is the fact that Fed Chair Jerome Powell recently suggested the central bank is nearing a point where it will stop reducing the size of its bond holdings and provided a few hints that more interest rate cuts are in the cards. Speaking to the National Association for Business Economics conference in Philadelphia, Powell delivered a dissertation on where the Fed stands with “quantitative tightening,” or the effort to reduce the more than $6 trillion of securities it holds on its balance sheet. Though there was no timetable suggested, the fact that the Fed is now considering this change in policy bodes well for those who are hoping for a decrease in rates this week, and if the Fed starts purchasing bonds and perhaps mortgages to replace the portfolio runoff, this could also bode well for the direction of mortgage rates.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued their downward trend as the government shutdown continued, and the next meeting of the Fed approached. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.19% last week from 6.27% the previous week. In addition, 15-year loans eased to 5.44%. A year ago, 30-year fixed rates averaged 6.54%, 0.35% higher than today. Attributed to Freddie Mac: “Mortgage rates continued to trend down this week, hitting their lowest level in over a year. At the start of 2025, the 30-year fixed-rate mortgage surpassed 7%, while today it hovers nearly a full percentage point lower. This dynamic has kept refinancings high, accounting for more than half of all mortgage activity for the sixth consecutive week.”  Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Confidence about meeting retirement goals varies widely across generations, with Generation X standing out as the least optimistic, according to new research. PNC Bank’s third annual Financial Wellness in the Workplace Report found that Gen Z is the most confident about their post-working years, with 56 percent saying they are “somewhat” or “very confident” they will reach their retirement goals. Millennials and Baby Boomers reported equal confidence at 50 percent. But only 43 percent of Gen Xers expressed confidence—the lowest among all age groups. America’s retirement landscape has shifted dramatically in recent years, leaving many struggling to save enough for later life. A 2023 Pew Research Center report showed that about one in five Americans aged 65 and older were still working—nearly double the share from 35 years ago. Rising living costs, inflation eroding purchasing power, and longer life spans have all made stepping away from the workforce more difficult than ever. Experts say this lack of confidence reflects both structural and personal financial challenges. Karla Dennis, finance expert and CEO of tax planning firm KDA, Inc., described Gen X as being under extraordinary pressure.  “I believe so few Gen Xers feel confident about retirement because they are carrying the heaviest load right now. They’re paying mortgages, putting kids through college, and in many cases helping aging parents,” Dennis told Newsweek.  “On top of that, many of them never fully recovered from the 2008 crash, so their retirement savings fell behind. With pensions disappearing and Social Security looking shaky, it makes sense that they’re worried.”  Source: Newsweek

According to a recent Clever Real Estate survey, 61% of Baby Boomer homeowners say they never plan to sell their homes. This statistic, which is an increase from 54% in 2024, reflects a broader trend of older adults choosing to “age in place”. The decision for Boomers to stay put has significant implications for the housing market and for the seniors themselves. Here are the reasons Boomers are staying in their homes:

• Financial stability: Many older homeowners have paid off their mortgages or have very low interest rates, making it more affordable to stay in their current home than to buy a new one.
• Emotional attachment: Boomers often have a sentimental connection to their homes and the communities they have lived in for many years. Staying put allows them to remain close to family and friends.
• Independence: For many older adults, the ability to live independently is a high priority. Aging in place offers a sense of control and freedom that may be perceived as being lost in an assisted living facility.
• Lack of financial incentive to move: In addition to low mortgage rates, factors like property tax systems in some states offer financial benefits to those who stay in their homes as they age.
• Avoiding difficult decisions: It is human nature to put off thinking about challenging life changes, like the potential need for assisted living later in life. 

While aging in place is the preferred option for many, it comes with several challenges:

• Need for home modifications: Only about 10% of U.S. homes have the necessary features to safely accommodate seniors, such as step-free entryways and first-floor bedrooms and bathrooms.
• Health and mobility concerns: Over time, declining health and mobility can make daily tasks more difficult and increase the risk of falls. Many seniors who plan to age in place admit that a serious health issue could force them to reconsider.
• Social isolation: Despite maintaining community ties, older adults can still experience social isolation and loneliness, especially if their mobility becomes limited. 

This trend has a major impact on the housing market, especially for younger generations by limiting inventory, especially for larger “family-sized” homes.  Source: Clever Real Estate