What Jerome Powell’s Signals Mean for California Homebuyers

Mortgage rates have been stubbornly high in California, frustrating many looking to buy. But a recent shift in tone from the Federal Reserve may offer a glimmer of relief.

According to the sfchronicle.com, Federal Reserve Chair Jerome Powell hinted that a rate cut could be coming this September. He noted that the U.S. economy remains resilient: unemployment is low, inflation has eased significantly since its pandemic peak, and the current policy stance could warrant adjustment .

This news sparked a rally in the stock market and pushed investors to anticipate an interest-rate cut in mid-September. Financial analysts at Morgan Stanley have updated their outlook, predicting a first cut then, followed by additional reductions through year-end and into 2026.

Still, mortgage rates haven’t dropped dramatically yet. They’re still hovering in the mid-6 percent range—the lowest they’ve been in 2025, but not low enough to ignite major buying frenzy.

In markets with limited inventory—particularly the Bay Area—these modest rate improvements haven't yet translated to noticeable price drops. Even so, this environment is creating a rare opportunity for buyers, narrowing the gap toward a more balanced market .

Prospective homebuyers may see an uptick in affordability if rates do decline further—but that could also reignite demand, which might keep prices from falling substantially.

What This Means for You 

For California buyers, even a small rate easing could enhance purchasing power. That said, if demand jumps back quickly, price relief could remain modest.

source: sfchronicle.com