Mortgage Market Update October 13th 2025: Renovations and and Fed Rate Cuts

 

Key Takeaways

1. Senate Passes ROAD to Housing Act — What It Means for Real Estate

On October 10, the full Senate approved its version of the FY 2026 National Defense Authorization Act (NDAA), which includes the “Renewing Opportunity to the American Dream” (ROAD) to Housing Act as a Manager’s Amendment. Scotsman Guide+3Realtor+3National Mortgage Professional+3

The ROAD proposal is a sweeping legislative package designed to tackle persistent housing challenges. It passed the Senate Banking Committee unanimously (24–0) earlier this summer. National Mortgage Professional+2MBA+2

What the ROAD Act aims to do

Here are some of its provisions that real estate pros, buyers, and sellers should watch:

MBA (Mortgage Bankers Association) has expressed conditional support, while stressing the need to refine certain provisions (notably around lender liability and mandated second appraisals) before final passage. MBA Newslink+2Senate Banking Committee+2

Why this matters for realtors, buyers, and sellers

  • More construction = more inventory over time. Many markets struggle with supply constraints. If these reforms reduce regulatory friction, approvals and starts could increase.

  • Greater financing flexibility for lower-dollar loans or rural markets may bring new buyers into play.

  • Local zoning changes could open doors for infill development or ADUs, which helps in denser or mature neighborhoods.

  • Permitting / environmental review speed improvements may accelerate project timelines and improve predictability.

  • Uncertainty remains: The House’s NDAA lacks these housing provisions, so we’ll need to see how House-Senate conference resolves them. Scotsman Guide+2National Mortgage Professional+2

Action for realtors and agents: stay tuned to how the final bill evolves, educate your clients about potential changes in financing and supply, and be ready to leverage any new local development opportunities stemming from zoning reform or infill incentives.

2. Remodeling Market Update — Q3 2025

Remodelers are cautiously optimistic. According to the NAHB/Westlake Royal Remodeling Market Index (RMI), sentiment ticked up to 60 in Q3 (from 59). National Association of Home Builders+2Eye On Housing+2

Here’s the breakdown:

Headwinds & tailwinds:

Implications for realtors & sellers:

  • Sellers in older homes may find investing in key remodeling upgrades still worthwhile and marketable.

  • Realtors can leverage knowledge of material costs, timelines, and labor constraints in setting expectations for clients.

  • Buyers may consider the trade-off of buying as-is and remodeling versus paying more for fully updated homes.

  • In some markets, targeted improvements (kitchens, baths, energy upgrades) may boost listing appeal and price.

3. Interest Rates & Fed Watch: Are Rate Cuts Coming?

The Federal Reserve remains open to additional rate cuts in 2025, though the path is cautious. Barron's+3National Association of Home Builders+3Reuters+3

Recent mortgage & builder signals

What to watch

  • Fed policy statements & meeting minutes: Clues around inflation trajectory, labor market strength, and rate cut timing.

  • Inflation data: If inflation stays sticky, rate cuts may be delayed.

  • Housing starts / building permits: If mortgage relief spurs new construction, that could feed back into sentiment and rates.

  • Mortgage application volumes: Spikes in refinancing or purchase applications may presage broader rate movements.

Implications for buyers & sellers:

  • Buyers waiting on rate cuts will need to balance market timing with risks of missing favorable opportunities.

  • Sellers should monitor rate shifts — lower rates can pull in more buyers, tightening inventory.

  • Realtors and mortgage pros should help clients assess whether to lock rates now or wait, especially in volatile markets.

4. Strategy & Messaging Guidance

For Realtors:

  • Position yourself as a trusted guide on legislative change: your clients will appreciate explanations about how ROAD proposals may affect financing, zoning, and development.

  • Use remodeling data to stage conversations: “Given current material and labor cost pressures, here’s what improvements make sense now (versus waiting).”

  • Monitor mortgage rate movements daily and flag to clients when shifts reach tipping points.

  • In seller counseling, weigh the cost of upgrades vs listing “as-is” given trade-off between speed and price.

For Homebuyers / Sellers:

  • Buyers: Be prepared for shifting interest rates; locking a favorable rate could make the difference in affordability.

  • Sellers: Upgrades still pay off, but be realistic about ROI in your specific market (some improvements make more sense than others).

  • Watch for new development or infill opportunities, especially in communities that may adopt zoning reforms or fast-tracked review.


About Between Two Doors
Between Two Doors is a podcast where I talk with Realtors about their journey, aiming to connect home buyers and sellers with agents on a more personal level. I ask "right brain" questions that go beyond transactions, focusing on the experiences, values, and passions that make these professionals great at what they do.

Listen to more episodes at: https://www.betweentwodoors.com

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