Mortgage Rates Just Dropped. What That Means for Seattle, the Eastside and Bainbridge

Mortgage rates moved lower this week, and the Federal Reserve cut its policy rate on September 17, 2025. Those two facts working together are changing the market math for buyers, sellers and homeowners across the Puget Sound region. Here’s what happened, what it means locally, and the practical moves you can consider next.

What happened — the quick facts

• The Federal Reserve lowered the target federal funds rate by 25 basis points, moving the range to 4.00%–4.25%. This was the Fed’s first cut since December 2024. 

• Freddie Mac reports the 30-year fixed mortgage fell to 6.35% for the week ending September 11, 2025, its lowest weekly average since October 2024. That represented a roughly 0.15–0.25 percentage point weekly drop and about a 40 basis point decline since mid-July. 

• Mortgage applications and refinance activity spiked following the drop, with the Mortgage Bankers Association showing overall applications up nearly 30% and refinance requests jumping about 57.7%. That activity often signals more buyers and homeowners responding quickly to lower rates. 

Why this matters for the local market

Even modest moves in mortgage rates change what buyers can afford and how sellers should time or price their listings. Below are the locally relevant takeaways based on recent regional data and trends.

1) Buyers: a clearer path to affordability

Lower mortgage rates increase purchasing power immediately. For example, a 0.25% drop on a 30-year loan can lower monthly payments by several hundred dollars depending on loan size. For buyers priced close to the margin, that can unlock neighborhoods that were previously out of reach. Freddie Mac’s drop to 6.35% is already prompting more purchase activity nationwide, which you’re likely to see in Seattle and on the Eastside. 

2) Sellers: renewed buyer interest, but preparation wins

When rates fall, some buyers who paused return to the market. That means well-priced, well-presented homes can see faster activity. Local brokers have reported increased showings after the recent rate moves. Still, inventory levels in our region have risen year-over-year, so pricing and staging matter more than ever to win attention. NWMLS data shows pending sales trends are holding steady even as inventory grows, which suggests motivated buyers are active but selective. 

3) Homeowners: refinancing is worth a look now

Refinance volume jumped after the rate decline. If you locked a mortgage at a significantly higher rate earlier in the year, it’s smart to get a quick quote. Depending on your remaining loan term and closing costs, refinancing could lower monthly payments or make room to accelerate principal paydown. The recent uptick in refinance applications reflects precisely this opportunity. 

Local context — what the numbers say for our neighborhoods

• Seattle: Inventory has increased notably compared with last year, giving buyers more options. At the same time, median prices remain elevated in many neighborhoods, so the rate drop helps buyers compete in pricier submarkets. Local reports and the REMAX overview show a near-term balance shifting toward the buyer in some pockets.

• Eastside/Bellevue: New mixed-use developments and strong employment fundamentals continue to support demand. Lower rates may nudge lifestyle buyers off the fence and increase interest in premium properties that offer long-term value. 

• Bainbridge Island & Waterfront Markets: These lifestyle markets often react differently than urban core neighborhoods, but increased buying power and renewed local demand can lift highly desirable listings, especially those with unique amenities and waterfront access. Local brokers report that quality listings still command attention. 

Quick checklist — what to do next

Buyers

• Get a new pre-approval reflecting current rates to see your updated purchasing power.

• Talk to a mortgage pro about locking options; small rate changes can alter affordability.

• If you’re close to a decision, consider moving quickly on well-priced homes.

Sellers

• Reassess pricing with your agent now that demand may pick up.

• Invest in staging, photography and small repairs to stand out in growing inventory.

• Prepare for more showings and a faster timeline if priced right.

Owners considering refinance

• Request quotes from at least two lenders and calculate break-even timelines on closing costs.

• If your rate is substantially higher than today’s offers, refinancing could make financial sense.

Final thoughts

Today’s Fed action and the resulting drop in mortgage rates are meaningful for local homeowners and buyers. The immediate effect is clearer borrowing power and an uptick in activity; the medium-term effect will depend on upcoming inflation readings, job growth data and Treasury yields. We’ll keep tracking the numbers and reporting what they mean for neighborhoods across the Puget Sound.

_{Sources: Federal Reserve Board, Freddie Mac, Mortgage Bankers Association (MBA), CME Group FedWatch Tool, U.S. Bureau of Labor Statistics (BLS), U.S. Department of Labor, U.S. Department of Commerce, U.S. Department of the Treasury – Daily Treasury Yield Curve Rates, September 2025}