Updates from Neighborhood Loans – October 2025 Newsletter
by Andrew Augustyniak, Neighborhood Loans
Mortgage rates have finally shown some relief as we head into the last quarter of 2025. As of mid-October, the average 30-year fixed mortgage rate sits around 6.25%, down slightly from recent highs earlier in the year. While still elevated compared to the ultra-low rates of just a few years ago, this small improvement has created a bit more breathing room for buyers and investors who have been sitting on the sidelines.
The recent easing in rates is largely tied to movements in the 10-year Treasury yield, which briefly dipped below 4%. That’s been one of the main drivers of this year’s mild rate relief. However, yields are still much higher than we saw pre-pandemic, which means volatility remainsa constant. The Federal Reserve has held its policy rate steady since mid-year, and although there’s been talk of possible cuts ahead, those changes don’t always translate directly to lower mortgage rates. For now, we’re likely to see rates hover in this general range through the end of the year unless inflation takes a sharper dip.
On the housing front, buyer demand has cooled as affordability challenges continue, but that’s created opportunity for investors. We’re seeing less competition in many markets and more room to negotiate on price or terms. For those using leverage, the cost of money still matters—but deals are being made by investors who know how to structure creative financing or find yield through value-add opportunities and rental strength.
This is also a time to be cautious and disciplined. Build your cash flow models around today’s rates, not wishful thinking about future cuts. Consider adjustable-rate or portfolio loans if they fit your investment timeline. And remember, a smaller pool of buyers doesn’t necessarily mean lower risk—do your due diligence on rents, taxes, insurance, and maintenance costs, which continue to rise in many markets.
One major headline in the housing and lending world right now is the D.R. Horton and DHI Mortgage lawsuit. The builder and its affiliated lender are being accused of misleading buyers with artificially low “estimated” monthly payments that excluded property taxes, leading to payment shock after closing. This situation is a good reminder for everyone in our business—whether you’re an investor or helping others purchase—to dig into the numbers and make sure all costs are clearly disclosed and understood. Transparency is critical, especially when financing and affordability are tight.
For those interested in expanding beyond Arizona, our team partners with a trusted out-of-state investment group that provides a true white-glove service for investors looking to buy rentals in other states. They handle everything from identifying strong markets and sourcing properties to helping with management and long-term performance. It’sa great way to diversify geographically without taking on the operational burden yourself. If that’s something you want to learn more about, reach out and I’llconnect you directly.
All in all, the fall market is showing steady opportunity for those who stay informed and act strategically. Rates are still high enough to keep the amateurs out, but smart investors are finding ways to make dealspencil—especially those willing to think creatively and look beyond their backyard.