Interest Rates in March 2025: What’s Happening and What It Means for Nacogdoches Homebuyers and Sellers
By Stephanie Simmons, Nacogdoches Realtor
March 5, 2025
Hello, Nacogdoches neighbors and real estate enthusiasts! As your local Realtor, I’m always keeping an eye on the factors that impact our housing market here in East Texas. One of the biggest topics on everyone’s mind lately is interest rates—and specifically, whether we’ll see any cuts this week or in the near future. With the Federal Reserve’s next meeting just around the corner on March 18-19, let’s dive into what’s happening with interest rates and what it could mean for homebuyers and sellers in Nacogdoches.
No Cuts This Week—What’s the Scoop?
As of today, March 5, 2025, there’s no indication of an immediate interest rate cut this week. The Federal Reserve has been in the spotlight after making three cuts in 2024 (September, November, and December), bringing the federal funds rate down to a range of 4.25% to 4.5%. However, at their January meeting, they hit pause—and experts widely expect them to hold steady again at the upcoming March meeting. Why? Inflation is proving stickier than anticipated, clocking in at 3% annually in January, above the Fed’s 2% target. Plus, the economy is showing resilience with solid job growth, reducing the urgency for immediate cuts.
So, what does this mean for mortgage rates? Unfortunately, don’t expect a dramatic drop anytime soon. The 30-year fixed mortgage rate is hovering around 6.87% as of mid-February, according to Freddie Mac, and many forecasts suggest it’ll stay in the 6.5% to 7% range through much of 2025. While that’s not the sub-6% dream some buyers were hoping for, it’s a reality we’re adjusting to here in Nacogdoches.
How This Impacts the Nacogdoches Housing Market
Nacogdoches has always been a unique market—rooted in small-town charm with a vibrant community feel, yet influenced by broader economic trends. Here’s how the current interest rate environment is shaping things locally:
Buyers: Affordability Remains a Challenge
With mortgage rates holding steady in the upper 6% range, affordability is still a hurdle for many first-time buyers and families looking to upgrade. For example, on a $200,000 home (close to Nacogdoches’ median price range), a 6.87% rate translates to a monthly payment of about $1,315 (principal and interest), compared to $1,199 at 6% or $999 at 5%. That $100-$300 difference can stretch budgets thin. However, I’m seeing buyers adapt—some are opting for adjustable-rate mortgages (ARMs) or exploring down payment assistance programs to make homeownership work.
Sellers: The Lock-In Effect Persists
High rates are keeping many homeowners “locked in” to their current low-rate mortgages (think 3%-4% from a few years back). This reluctance to sell is keeping inventory tight in Nacogdoches, which supports steady home prices. If you’re thinking of listing, this could be a silver lining—less competition might mean more eyes on your property. But pricing it right and staging it well are key to standing out.
Pent-Up Demand Is Brewing
Despite the higher rates, I’m noticing a quiet buildup of buyer interest. People still want to call Nacogdoches home—whether it’s for the proximity to Stephen F. Austin State University, our historic downtown, or the peaceful piney woods. If rates do ease later this year (some predict two quarter-point cuts by December), we could see that demand unleash, potentially heating up our market.
What’s Next for Interest Rates?
Looking ahead, the Fed’s cautious stance suggests we won’t see significant movement until inflation cools further or the economy shows signs of slowing. Some experts, like those at Morningstar, argue we might get four cuts in 2025 if inflation drops below 2% by year-end. Others, including Fannie Mae, forecast rates settling around 6.5% by December. Add in uncertainties like potential tariffs from the new administration, and it’s a bit of a waiting game.
Locally, I’ll be watching the March 18-19 Fed meeting closely. While a cut isn’t likely, any hints about future plans could nudge mortgage rates slightly. Even a small dip could boost buyer confidence here in Nacogdoches.
Tips for Navigating Today’s Market
Whether you’re buying or selling, here’s how to make the most of the current landscape:
For Buyers: Don’t wait for the “perfect” rate—it might not come soon. Shop around for lenders (rates can vary!), lock in when you find a good deal, and focus on what you can afford today. I’d love to connect you with trusted local lenders who can crunch the numbers for you.
For Sellers: Highlight what makes your home special—Nacogdoches buyers love character and value. Let’s strategize on pricing and marketing to get your listing noticed.
For Everyone: Stay informed and flexible. The market can shift, and I’m here to guide you through it.
Let’s Talk Nacogdoches Real Estate
No matter where interest rates land, Nacogdoches remains a fantastic place to buy, sell, or invest in a home. If you’re curious about how these trends affect your plans—or just want to chat about the market over a coffee at one of our local spots—reach out! As your Nacogdoches Realtor, I’m here to help you navigate every step of the way.
What are your thoughts on today’s rates? Drop me a line or give me a call—I’d love to hear from you!
Stephanie Simmons
Nacogdoches Realtor