If you’ve been watching mortgage rates with your Zillow tab open (we see you), you’re not alone. Buyers and sellers all over the Northwest Side of Chicago — from Jefferson Park to Portage Park — are asking the same question: Will interest rates finally come down this year?
Let’s break down what’s happening, what the experts are predicting, and what it could mean for our local market.
đź”’ Where Are Interest Rates Now?
As of August 2025, the Federal Reserve is holding the federal funds rate steady in the 4.25%–4.50% range — and has for the fifth time this year. Translation? They’re being cautious. Inflation has slowed but not quite enough to start cutting with confidence.
That said, there are hints that change is coming.
🔮 What’s the Fed Thinking for the Rest of the Year?
The Fed’s most recent projections suggest they could cut rates once or twice by the end of 2025, bringing the benchmark rate down to around 3.9%. Some analysts — like those at JPMorgan and Goldman Sachs — think the first cut might come as soon as September.
Others are urging caution, warning that we might not see real movement until early 2026.
So, we’re in a bit of a “wait and see” moment. But if you’re buying or selling soon, here’s why that matters…
🏡 What This Means for the Northwest Side of Chicago
We’ve seen firsthand how sensitive our local market is to rate changes. Here’s how it’s playing out across the Northwest Side:
1. Affordability Is Tight, but Activity Is Still Strong
Rates hovering around 6.7% for a 30-year mortgage are keeping monthly payments higher than most buyers would like. But demand in areas like Norwood Park and Edison Park hasn’t slowed — well-priced homes are still moving fast and, in some cases, over list.
2. Buyers Are Eager for Breathing Room
Even a small drop in rates could translate into real affordability for buyers on the edge. That means more competition, more offers, and possibly a second wind for sellers who have been sitting on the sidelines.
3. Sellers Shouldn’t Wait Forever
If you’re thinking of selling this fall, don’t try to time the “perfect” rate drop. Inventory is still relatively low on the Northwest Side, and serious buyers are already out shopping — especially if rates dip even a little.
đź—“ What to Watch Next
📅 August 22 – Fed Chair Jerome Powell speaks at Jackson Hole. Expect headlines.
📅 September 17 – Next official Fed rate decision. Could be our first real cut.
âś‹ Our Take
Whether rates drop by a quarter point this fall or stay flat into 2026, the Northwest Side of Chicago continues to be one of the most resilient markets in the city. If you’re buying, selling, or just rate-watching, don’t go it alone.
