Buyer tips

The Fed just raised rates. What should buyers do now?

By Antonia Bagoje, Realtor, CA DRE #02134539. Published September 24, 2026

If you've been watching the news, you probably saw that the Fed raised rates last week. Here's what happened. The Federal Reserve raised rates by a quarter percentage point at its September meeting, bringing the federal funds rate to a range of 3.75% to 4.00%. It was the Fed's first increase since July 2023.

The first question I get is always the same: "So mortgage rates just went up too, right?"

Not exactly. And understanding why will make you a much smarter buyer.

The Fed doesn't set your mortgage rate

The federal funds rate is what banks charge each other to borrow money overnight. Your 30 year mortgage is a completely different product. Mortgage rates follow the bond market, specifically the 10 year Treasury, and the bond market is always looking ahead. It's constantly guessing what the Fed will do next and pricing that in before anything official happens.

That's exactly what we saw this month. Before the decision, investors had put the odds of a hike at 90%. So by the time the Fed actually announced it, mortgage rates had already moved. During the week of September 7 through 11, before the Fed even met, the benchmark 30 year rate rose from 6.77% to 6.88%, a new 52 week high. By the time the announcement came out, the market had already done most of the work.

So when you hear "the Fed raised rates," don't expect mortgage rates to jump the next day. And when the Fed eventually cuts, don't expect rates to drop overnight either. The market will already be there.

Where rates are right now

As of September 17, Freddie Mac had the 30 year fixed at 6.95%, up from 6.76% the week before. For context, the low this year was 5.90% on February 27. That's almost a full point higher in about seven months.

Let's talk about expectations

This is the part I really want buyers to hear.

At the start of this year, almost everyone expected rates to come down. We had a new Fed chair coming in, and the assumption was that he would push rates lower. Kevin Warsh was sworn in as Fed chair on May 22, 2026. But the market came into the year expecting cuts, and by March it was already pricing in several hikes before the end of the year. Inflation didn't cooperate, and the story changed.

I've watched this cycle before. When rates go up, it takes people time to adjust. Everyone remembers the rate they almost got, or the rate their friend locked in, and they hold out for it to come back. Meanwhile life keeps moving. The kids keep growing, the lease keeps renewing, and the house you liked goes to someone else.

Nobody knows exactly where rates are going, including me. But waiting for a number that may not come back anytime soon isn't a strategy. The buyers who do well in a market like this are the ones who reset their expectations, look at what the monthly payment actually is today, and decide based on their own life and their own numbers.

What this means here in the East Bay

People are still buying. Newark had 119 home sales in August, up from 95 a year ago, and homes are selling in about 26 days on average. Well priced homes are still moving even with rates near 7%.

If you're thinking about buying this fall, here's what I'd do. Talk to a lender now so you know your real number. Compare quotes from more than one lender. Then let's look at homes that fit that number, instead of waiting on a headline.

Have questions about what today's rates mean for your budget in Newark, Fremont, Hayward, or Union City? Reach out. I'm always happy to walk through the numbers with you.

Thinking about selling instead? Read my take on selling your home this fall with rates near 7%.

Frequently asked questions

Does the Fed set mortgage rates?

No. The Fed sets the federal funds rate, which is what banks charge each other to borrow overnight. Mortgage rates follow the bond market, mainly the 10 year Treasury, which prices in expected Fed moves ahead of time.

Why didn't mortgage rates jump when the Fed raised rates in September 2026?

Investors had already put the odds of a hike at about 90%, so mortgage rates rose in the weeks before the meeting. By the time the Fed announced it, the market had already priced it in.

Where are mortgage rates right now?

As of September 17, 2026, Freddie Mac reported the average 30 year fixed rate at 6.95%, up from a 2026 low of 5.90% at the end of February.

Should I wait for rates to drop before buying in Newark or Fremont?

Nobody can predict where rates are going. Instead of waiting for a specific number, talk to a lender, compare quotes, know your real monthly payment today, and decide based on your own finances and timeline.

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