The Federal Reserve increased its federal funds rate by 0.25 percentage point to a 3.75%–4.00% target range on Sept. 16, 2026. That affects short-term borrowing and Prime-linked products quickly, but long-term mortgage rates follow the bond market and other factors. For some buyers, assumable mortgages with below-market rates offer an alternative.
A Fed rate increase raises short-term borrowing costs and influences Prime, so HELOCs, credit cards and variable-rate loans can get more expensive quickly.
Long-term fixed mortgage rates are driven more by 10-year Treasury yields, inflation expectations and investor demand for mortgage-backed securities than by the Fed’s overnight rate.
Homebuyers should match financing type to the buyer and property — conventional, FHA, VA, USDA, assumable loans or home-equity products can all be appropriate depending on circumstances.
When the Federal Reserve changes interest rates, homebuyers and homeowners often assume mortgage rates will immediately move in the same direction. On September 16, 2026, the Federal Reserve raised its target range for the federal funds rate by one-quarter percentage point to 3.75%–4.00%. That decision affects short-term borrowing costs and is closely connected to the Prime Rate used by banks.
Meanwhile, Freddie Mac reported that the average 30-year fixed mortgage rate was 6.76% for the week ending September 10. Long-term fixed mortgage rates tend to track the bond market, particularly the yield on the 10-year U.S. As a result, a Federal Reserve announcement does not necessarily tell buyers what will happen next with mortgage rates.
Products such as Home Equity Lines of Credit (HELOCs), credit cards and some other variable-rate loans are often tied directly or indirectly to Prime, so changes in Federal Reserve policy can affect those borrowing costs relatively quickly. Treasury, much more closely than they track the federal funds rate. That distinction is particularly important right now.
The Federal Reserve just raised the cost of money — bad news for borrowers, good news for savers. The Fed increased its benchmark interest rate Wednesday by a quarter-point , the first rate hike since the summer of 2023. The hike will likely make it even costlier to borrow for homes, autos and other purchases. But if y
Mortgage rates have climbed in recent weeks, putting the squeeze on homebuyers and borrowers. What’s next after the Fed’s big move?
WASHINGTON — The Federal Reserve just raised the cost of money — bad news for borrowers, good news for savers. The Fed increased its benchmark interest rate Wednesday by a quarter-point, the first rate hike since the summer of 2023. The hike will likely make it even costlier to borrow for homes, autos and other purchas
The Fed’s first rate hike in more than three years comes as mortgage rates hover near 7%, putting renewed pressure on buyer affordability. The post Fed Raises Rates for First Time in 3 Years as Mortgage Rates Hover Near 7% appeared first on The Close .
By Jeanne Sahadi, CNN (CNN) — For the first time in more than three years, members of the Federal Open Market Committee unanimously decided to hike the Fed’s key overnight bank lending rate by a quarter point in a bid to reduce inflation, which remains well above the central bank’s 2% target. And 16 of
No matter where you go, the price of everything is up. For the first time in three years, the Federal Reserve is raising interest rates by a quarter percent.
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