On September 16, 2026, the Federal Reserve voted to raise its benchmark federal funds rate by a quarter of a percentage point, to a range of 3.75% to 4%. It was the Fed's first rate increase since 2023, and policymakers pointed to inflation that's still running above their 2% goal.

The question I got the next morning: "Does this mean mortgage rates are going up?" The honest answer is, not directly.

What the Fed actually controls

The federal funds rate is the rate banks charge each other for overnight loans. It affects short-term borrowing, like credit cards, home equity lines of credit and some adjustable-rate loans, fairly quickly.

A 30-year fixed mortgage is a very different animal. It's a long-term loan, and lenders price it based on what investors are willing to pay for long-term mortgage bonds.

What really moves mortgage rates

  • The 10-year Treasury yield. Mortgage rates tend to move in the same direction as this benchmark, because investors compare the two.
  • Inflation expectations. When investors expect higher inflation, they demand higher yields, and mortgage rates rise. This is why the Fed's comments about inflation can move rates more than its actual decision.
  • The economy and world events. Strong jobs reports, energy prices and global conflicts all ripple through bond markets.
  • Demand for mortgage-backed securities. Most mortgages are bundled and sold to investors. Their appetite affects pricing.

That's why mortgage rates sometimes fall on the day the Fed raises rates, or rise on a day it cuts. Markets often price in the Fed's move weeks ahead of time.

What you can control

You can't control the bond market, but several things about your rate are in your hands:

  • Your credit. Higher scores generally get better pricing. See how mortgage credit scoring is changing.
  • Your down payment. More equity usually means less risk and better pricing.
  • Your loan type. FHA, VA, USDA and conventional loans are priced differently. The right one depends on your situation.
  • Points and buydowns. You, or a seller, can pay to lower your rate. Sometimes it pays off, sometimes it doesn't.
  • When you lock. Once you're under contract, a rate lock protects you from market swings before closing.

Should you wait?

I can't tell you where rates are headed, and neither can anyone else with certainty. What I can do is show you the payment today, what it would look like if rates moved up or down, and whether the home still fits your budget either way. The right home at a payment you're comfortable with is usually a better plan than trying to time the market.

Want today's numbers for your situation? Reach out and I'll run them for you.