Favorable Appreciation Forecast, Fed Minutes Show Division

[Derek Brickley]

Week of October 6, 2025

Hey everyone,

This week’s data paints a mixed picture: home prices are stabilizing with signs of renewed strength, while the Fed is split on what comes next for rates. Here’s what to know 👇

🏡 Why Homeownership Remains a Smart Investment

Cotality’s latest data shows home prices slipped just 0.3% in August but are still up 1.3% year-over-year. ICE’s report for September was even better — prices rose 0.17% month-over-month, marking the first uptick in eight months.

What’s driving it?

• Rates are easing, improving affordability to the best levels in 2.5 years.
• Inventory is tightening, with fewer new listings and more sellers pulling homes off the market.

📊 Bottom line: More buyers, fewer listings = upward pressure on prices. Cotality expects a 3.9% increase in home values over the next year — a solid outlook for agents and homeowners alike.

💬 Fed Minutes Reveal Deep Divide

The Fed’s September meeting minutes show just how split policymakers are. Some want to cut rates further to support the slowing job market, while others still worry inflation hasn’t cooled enough.

At that meeting, the Fed made its first rate cut of the year, dropping the Fed Funds Rate by 0.25%. (That’s the short-term rate banks charge each other, which indirectly influences mortgage rates.)

📊 Bottom line: The Fed’s in a tough spot — inflation is still above target, but growth is clearly slowing. The ongoing government shutdown has delayed key data, so the next Fed meeting on October 29 could bring more uncertainty (and potential volatility for rates).

🛍️ Retail Sales Cool in September, But Yearly Gains Hold

After two strong months, retail spending slowed in September — but annual sales remain healthy, led by online shopping, sporting goods, and apparel.

📊 Bottom line: Consumer spending is still holding up, which helps keep the economy afloat — but softer data like this supports the case for lower rates ahead.

📅 What’s Coming Up This Week

With the shutdown still affecting government reports, inflation, retail sales, and housing starts are likely to be delayed. However, we’ll still get the Homebuilder Confidence Report on Thursday, offering a pulse check on construction sentiment.

Catch you next week, Derek Brickley #LoansbyDB