Fed Cuts Rates Again — What It Means for St. George Buyers & Sellers (December 2025 Update)

By Lance Clifford, St. George Real Estate

The Federal Reserve just cut interest rates for the third time in 2025, bringing the federal funds rate down another 0.25%. But unlike earlier this year, this vote was deeply split, and the Fed is signaling that 2026 may bring only one additional rate cut.

Here’s what actually matters for Southern Utah buyers and sellers — without the Wall Street noise.

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What the Fed Actually Did

Federal Reserve policymakers lowered the benchmark rate to 3.5%–3.75%, continuing a trend of easing that began early this year. But the vote wasn’t unanimous:

• 9 members voted to cut rates
• 3 members voted against it — two wanted no cut, and one pushed for a larger cut

That division tells us the Fed is torn between two concerns:

• Inflation, which is still above their 2% target
• A weakening job market and rising unemployment

With some government data delayed by the shutdown, policymakers are also navigating with incomplete information.

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Powell: A Small Cut Won’t Fix Housing

Fed Chair Jerome Powell was surprisingly direct about housing. He acknowledged that the housing market faces major challenges, including low inventory and the “mortgage lock-in” effect — where sellers stay put because they don’t want to give up their low rate.

He also said, in essence, that a small rate cut by itself probably won’t change things overnight for homebuyers.

The bigger takeaway for our area (St. George, Washington, Hurricane, Ivins):

• Lower rates help, but they don’t magically create more homes for sale.
• Our local inventory situation still matters more than a single Fed move.

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What the Fed Expects Next

Along with the rate decision, the Fed released its economic projections:

• Inflation expected to ease to about 2.6% next year and near 2.1% in 2027
• The “dot plot” suggests only one more rate cut in 2026
• Risks to inflation are still tilted to the upside, and risks to employment to the downside

Some private economists think unemployment could rise faster than the Fed expects, which might force more cuts. For example, Pantheon Macroeconomics is projecting three additional quarter-point cuts next year—one each in March, June, and September—if the job market softens more quickly.

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What About Mortgage Rates?

Here’s the key point: the Fed does not directly control mortgage rates.

Mortgage rates move based on investor demand for mortgage-backed securities and expectations about future inflation and Fed policy. After the last round of cuts, we actually saw mortgage rates bounce around rather than simply dropping in a straight line.

Right now, futures markets that track 30-year conforming mortgage rates suggest investors expect rates to drift into the low 6% range by spring, assuming inflation continues to cool.

Locally in Southern Utah, that lines up with what we’re feeling: every time rates dip, we see:

• More showing activity
• More calls and inquiries
• Stronger interest in homes under about $700,000

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What This Means for Southern Utah Buyers

If you’re buying in St. George, Washington, Hurricane, Ivins, or the surrounding areas, here’s the practical impact:

• Affordability improves slowly as rates ease, not overnight.
• Waiting for 4–5% rates again is likely unrealistic in the near term.
• The real constraint is still inventory, especially in popular areas.

Right now, we’re seeing solid opportunities in neighborhoods like Little Valley, Desert Color, Washington Fields, Dixie Springs, Pecan Valley, Coral Canyon, and parts of Hurricane where prices are still more reasonable for what you get.

If you’ve been on the sidelines, this combination of slightly lower rates and more balanced inventory can be a smart window to act before competition heats up again in the spring.

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What This Means for Southern Utah Sellers

For sellers, this latest Fed cut is generally good news:

• Buyer confidence is improving as rate volatility calms down.
• More FHA and VA buyers are getting back into the market.
• Showing traffic is picking up compared to earlier in the year.

Homes that are:

• Priced correctly in the first 10–14 days
• Clean, updated, and well-presented
• Located in high-demand areas like Little Valley, Desert Color, and Washington Fields

are still getting strong offers and solid activity.

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Bottom Line for the St. George Real Estate Market

The December Fed meeting confirms what many of us here have already been feeling:

• Rates are slowly drifting downward, not spiking higher.
• Buyer activity is increasing, especially in the mid-price ranges.
• Inventory is still tight enough to support prices.

In short, we’re heading into 2026 with a market that looks healthier and more balanced than anything we’ve seen in the last three years.

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Thinking About Buying or Selling in 2026?

Every neighborhood in Washington County has its own pricing trends, demand level, and “sweet spot” strategy. If you’re thinking about making a move, I’m happy to walk you through what this Fed decision and the current rate outlook mean for your specific situation.

Call or text me anytime at 435-200-5508 or browse current listings and neighborhood guides at www.stgeorge.realestate.

We’ll put a smart plan together based on real numbers—not headlines.