Mortgage rates remained unchanged after the December 2025 Federal Reserve meeting, despite the Fed’s decision to cut the benchmark rate by a quarter-point. That’s in part because long-term mortgage rates don’t follow the central bank’s federal funds rate, which is a short-term overnight financing rate.
Although mortgage rates aren’t expected to fall drastically in the wake of the December Fed rate cut, that’s not necessarily bad news. Interest rates on mortgages were already at the lowest levels of 2025 before Fed officials cut rates, gradually creeping from above 7% at the beginning of the year towards the low-6% range currently. Consumers looking to buy a home or refinance their existing mortgages are well-positioned to do so amid improving affordability.
What’s more, the holiday season presents a good opportunity for those motivated to pause their gift shopping and make time for house shopping. After all, falling mortgage rates can lead to lower monthly payments — and more money in the budget for presents under the Christmas tree.
2025 Wish List: Cheaper Housing for the Holidays
Real estate activity generally peaks in the spring and summer months, with a slowdown in fall and winter. These seasonal homebuying trends persist year after year for a few practical reasons: Families with kids can get ahead of the school year if they move during the summer break. Longer daylight hours make it more feasible to tour homes outside of working hours. Favorable weather promotes lush, green landscaping — and livens up curb appeal.
Buying a home during the off-season can be difficult, especially for those who have school-age children. But those who can power through the winter doldrums may be rewarded with less competition and more power at the negotiation table. Last December, homes sat on the market for an average of 70 days, according to an analysis by Realtor.com.
“December is traditionally a slower time for the market, as people settle in for the holidays, and we expect to see a seasonal downturn each year,” Danielle Hale, chief economist at Realtor.com, says in the report.
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As an added bonus in 2025, mortgage rates are about a half-point lower this year than they were at the same time last year.
With the housing market moving toward a better balance and mortgage rates settling into the low-6% range, buyers can take advantage of improved housing affordability this holiday season. Extra festive cheer is awarded to those looking to buy in Zillow’s most festive holiday town in America, Santa Claus, Indiana, where more than half of listings (55%) reference the “holiday spirit.”
[See: When Will Mortgage Rates Go Down? See the 2026 Forecast]
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Lower Mortgage Rates Are a Gift for Holiday Homebuyers originally appeared on usnews.com