Market Update October 31, 2025

What Happened With Powell and Rates

Yesterday, Powell took a more hawkish tone in his comments. He emphasized that inflation remains a concern and that the economy continues to perform well. Because of that, the Federal Reserve isn’t in a rush to cut rates.

That kind of language tends to make bond markets nervous, and since mortgage rates follow the bond market, we saw rates tick up.

This is becoming a pattern. On Fed Day, when Powell or the Fed issues comments that sound cautious or concerned about inflation, mortgage rates often move higher, even when the Fed keeps rates unchanged.

It’s a reminder that while most people think the Federal Reserve directly controls mortgage rates, they really don’t.

Short-Term vs Long-Term Rates

Short-term rates are the rates the Fed directly influences, things like the overnight lending rate between banks, credit card APRs, and short-term business loans.

Long-term rates, on the other hand, are determined by the bond market and are tied to inflation expectations, investor confidence, and overall economic growth. These are what drive 15- and 30-year mortgage rates.

When the economy is strong and inflation remains sticky, investors demand higher returns on bonds, which pushes long-term mortgage rates higher.

That’s why we’ve seen this trend: when Powell sounds tough on inflation, long-term bond yields rise, and mortgage rates follow.

Most economists now expect mortgage rates to stay in the mid-sixes through much of 2026, barring a major economic slowdown.

Middle Tennessee Market Update

Locally, the housing market continues to show signs of balance.

Across the Nashville metro area, July home closings were up about three percent compared to last year, a good sign that buyers and sellers are both active again.

Home values are mostly flat year-over-year, which is actually healthy. It means we’re not seeing inflated prices or steep drops.

Inventory has increased slightly, giving buyers more homes to choose from and creating a more stable market.

Franklin and Brentwood remain strong, with well-priced homes still moving quickly.

Murfreesboro, Hendersonville, and Mt. Juliet are seeing a bit more breathing room — slightly longer days on market and more seller concessions.

Overall, Middle Tennessee remains one of the most stable real estate markets in the country. Buyers have leverage, and sellers who price right are still getting great results.

What This Means For You

For buyers: this is a window where you can negotiate, find options, and potentially lock in a rate before they trend higher again.

For sellers: it’s not 2021, but solid listings with realistic pricing are still selling well,  especially when paired with creative financing strategies.

For homeowners: if you haven’t reviewed your mortgage yet, it may be worth a look. Even small adjustments can save you significant interest over time.

If you’d like a quick review of your current loan or want updated rate scenarios for your specific situation, just reply to this email with a copy of your most recent mortgage statement.

I’ll personally review it and run the numbers for you — no obligation, just clarity.