Interest Rates in March 2025: What the Fed and Mortgage Markets Were Doing

On March 19, 2025, the Federal Open Market Committee left the federal funds target range at 4.25 to 4.5 percent and said plainly that uncertainty around the economic outlook had increased.[1] It also announced that from April it would slow the runoff of its Treasury holdings, cutting the monthly redemption cap from $25 billion to $5 billion.[1] That was a technical change, and most sellers never heard about it.

Mortgage rates were what buyers felt. Freddie Mac reported the 30-year fixed at 6.67% on March 20, 2025, barely moved from 6.65% the week before and below the 6.87% of a year earlier.[2] Freddie Mac’s chief economist noted that rates had stayed under 7% for nine straight weeks.[2] The California Association of Realtors put the February average at 6.84%.[3]

So the rate story in March 2025 was stability at a high level. Not a shock.

For heirs, that distinction matters. A lot of families I spoke with that spring wanted to hold the house until rates came down, on the theory that a lower rate would bring a flood of buyers and a better price. Sometimes that works. More often the estate pays the carrying costs on a vacant house for months while waiting for a Fed decision nobody can schedule, and the rate drop, when it arrives, is smaller than hoped.

How higher rates changed the buyer pool for estate homes

At 6.6% to 6.8%, the buyers who struggled most were the ones stretching into an entry price with a small down payment. Estate homes in places like Garden Grove or the older tracts of Fullerton are often exactly the dated, original condition houses that those buyers want and then cannot finance once repairs are added in. Cash buyers and investors filled part of that gap, and they negotiate accordingly.

Orange County Home Prices Were Still Rising in Early 2025

The national conversation in early 2025 sounded gloomy. The Orange County numbers did not. In February 2025 the county’s median price for existing single-family homes reached $1,465,500, up 8.6% from February 2024, with sales flat year over year and up 9.5% from January.[3]

All figures in the table come from the C.A.R. February 2025 sales release.[3]

Two things in that table shaped how I priced estate property that spring. Prices were up, so the house was very likely worth more than the family remembered. And homes were taking longer to sell statewide, 26 days at the median against 22 a year earlier,[3] which told me buyers were shopping harder and taking their time.

Inflation and the Cost of Holding a Probate or Trust Property

The February 2025 Consumer Price Index, released by the Bureau of Labor Statistics on March 12, 2025, showed all items up 2.8% over twelve months and the index excluding food and energy up 3.1%.[4] The shelter index was up 4.2%.[4]

Those are national averages and they do not line up neatly with an estate’s bills. Still, they matched what I saw on the ground: every month an inherited house sits empty costs more than it did a couple of years earlier. Repairs cost more, and contractors quote further out. Insurance renewals on older homes became a real conversation too, and some families found that out only when the policy came up for renewal.

The original version of this post said inflation can change appraised values by raising maintenance and renovation costs. That holds up in practice, with one adjustment. Inflation does not lower the value of a house in good condition. It widens the gap between a finished house and one that needs work, because buyers price the repair bill at today’s labor and material costs.

A short list of what an estate pays while it waits

• Property tax installments, which keep coming whether or not anyone lives there
• Homeowners insurance, including any vacancy coverage the carrier requires
• Utilities kept on for showings and inspections
• HOA dues, if the home is in a planned community such as many in Irvine or Mission Viejo
• Gardening and pool service so the property does not deteriorate
• Any mortgage or reverse mortgage interest still accruing

Add those up for six months before you decide that waiting for a better rate environment is free. It rarely is.

How Economic Changes Affect Probate Property Valuation

A moving market creates a specific problem for probate and trust properties: the valuation on file can stop matching reality. California’s Probate Code builds that risk into the sale process.

When a private sale of real property in a probate estate goes to the court for confirmation, section 10309 requires that the property was appraised within one year before the confirmation hearing, with a valuation date also within that year, and that the offer is at least 90 percent of the appraised value.[5] If the appraisal is older than that, or the court finds it too high or too low, a new appraisal can be obtained before the sale is confirmed.[5]

In a market where Orange County prices rose 8.6% in a year,[3] a twelve month old appraisal can be well behind. In a softening market it can be ahead, and then the 90 percent floor becomes the obstacle, because the best real offer may fall below it.

Date of death value and the tax side

There is a second valuation that matters to heirs. Under IRS rules, the basis of inherited property is generally its fair market value on the date of death, or on the alternate valuation date if the personal representative elects it.[7] When prices are rising, a house sold a year or two after the death may sell well above that basis, and the difference matters for capital gains. I covered the tax side in more detail in capital gains tax on an inherited house in California, and your CPA should run the actual numbers.

My view: get a solid date of death valuation early, then get a current market opinion right before listing. Two different questions, two different documents. Families who use one number for both purposes usually end up arguing about it later.

Trust Properties: Notice Deadlines and Beneficiary Pressure

Trust properties move on a different clock than probate, but they still have one. When a revocable trust becomes irrevocable because the settlor died, California Probate Code section 16061.7 requires the trustee to serve a notification on each beneficiary and each heir within 60 days.[6] That notice must warn recipients that they may not bring an action to contest the trust more than 120 days after it is served, or 60 days after a copy of the trust terms is delivered if that is later and within the 120 day period.[6]

In a calm market, those windows are paperwork. In March 2025, with buyers taking longer and rates bouncing week to week, they became part of the pricing conversation. A trustee who lists before the contest period runs out takes on a different kind of risk than one who waits, and a trustee who waits too long pays more holding costs. There is no answer that suits every family. It depends on how well the beneficiaries get along and how much cash the trust has to carry the house.

The original post said economic uncertainty leads to delays in decision making among heirs and beneficiaries. That was true then and it is true now. Uncertainty gives every sibling a reason to wait for a different number.

What I ask trustees to have ready before listing

• Confirmation of when the 16061.7 notification was served and on whom
• The trust’s cash position, so we know how many months of carrying costs it can absorb
• A current broker price opinion or appraisal, dated close to the listing date
• Written agreement, or at least written notice, on the pricing plan to every beneficiary
• A plan for personal property, because a full house shows and photographs badly

If you are earlier in the process, this trust sale checklist for California trustees walks through the full sequence, and this post on pricing trust property covers the comps side.

How I Advised Probate and Trust Clients in Spring 2025

Most of the strategies in the original post were sound, and I still use them. Here is how they played out in that particular market, and where I would push back on the original.

1. Price to the comps, not to the headlines. With the county median rising and buyers moving slower, the right price was the one the last six weeks of nearby sales supported. Overpricing an estate home in spring 2025 cost more time than it ever gained in dollars.
2. Decide on condition before you list. Sell as is, or do targeted work like fresh paint and new flooring. I weighed that trade carefully in selling trust property as is or preparing it. Inflation in labor costs made big renovations harder to justify, though small fixes still paid.
3. Disclose early and completely. Buyers scrutinized everything. A disclosure package and inspection reports available on day one kept them from walking away over surprises.
4. Market to every buyer type the house fits. The original post named several buyer profiles for estate homes. Investors looking for value were active that spring, and so were first time buyers who saw less competition, and the two want very different things from the listing.
5. Keep beneficiaries informed on a schedule. A short written update every week or two, with showing activity and feedback, prevents the late stage arguments that delay closings.

Where I disagree with the 2025 version of this post: it suggested that economic downturns lead to properties becoming undervalued, and that savvy realtors could spot those opportunities. For an estate that is selling, an undervalued house is not an opportunity. It is a loss to the beneficiaries. My job on a probate or trust listing is to get full market value for the heirs, and in March 2025 the data did not show Orange County values falling at all.

One line from the original that I would keep exactly: market conditions change the timing, not the duty. A trustee’s obligation to act prudently and in the beneficiaries’ interest does not pause because rates are high.

For a broader comparison of the two processes, see probate sale versus trust sale in California and how long a probate sale takes.

What Has Changed Since March 2025

Updated October 2026, from sources read this month.

The Fed has cut since then. On October 28, 2026, it held the federal funds target range at 3.75 to 4 percent, a full half point below the March 2025 range.[8] That decision had two dissents, from Lisa Cook and Beth Hammack, both of whom preferred a quarter point increase.[8] A Fed that is debating hikes is not one that heirs should count on for cheaper mortgages soon.

Mortgage rates did not follow the Fed down. C.A.R. reported that the 30-year fixed averaged 6.86% in September 2026, up from 6.35% a year earlier.[9] That is roughly where they were in February 2025.[3]

Monthly medians in different seasons are not a precise comparison. The direction is still clear enough. Orange County values held and edged up while sales volume stayed soft. And the rate relief many families were waiting for in March 2025 never really reached the mortgage market.

For an estate deciding today whether to sell or hold, that history is the lesson I would take from it. Waiting for rates was a bet, and for most of the families who made it, the house costs more to carry and is worth about what the comps said it was worth eighteen months ago. For a more recent read on the county, see the Orange County housing market update for August 2026.