Okay, so the Fed did something it hasn’t done in three years: it raised rates.

On September 16, the Federal Reserve bumped the federal funds rate up a quarter point, to a range of 3.75% to 4%. First increase since 2023. The vote was unanimous, and the reasoning was simple: inflation is still running above their 2% target, and the economy is strong enough to handle it. Job market’s holding steady, spending is solid, so they pulled the lever.

Here’s the part that actually matters to you: the Fed doesn’t set your mortgage rate. The 10-year Treasury does most of that work, and it sat near 5% around the announcement, its highest level since 2007. That’s why the average 30-year fixed rate ticked up too, from 6.85% to 6.97% the week of the decision, according to the Mortgage Bankers Association. Applications dropped 4.1%. Refinances took the bigger hit.

So what now?

If you’re buying:

Rates near 7% aren’t fun, I won’t pretend otherwise. But builder confidence just fell to its lowest point in a year, and that actually works in your favor. Over a third of builders cut prices last month, and two thirds are offering incentives like rate buydowns or closing cost credits just to keep buyers moving. If new construction is on your radar, this is a real window to negotiate.

And for resale, the advice hasn’t changed: get pre-approved so you know your real number, not the headline number. You’re not marrying this rate. You’re buying the house. If rates come down later, you refinance. If they don’t, you’re still building equity instead of paying someone else’s mortgage.

If you’re selling:

Buyers are more rate sensitive right now, and builders sweetening the pot means resale homes need to show up sharp. Priced right from day one, presented well, and marketed properly, homes are still moving in our area. Overpriced ones are the ones sitting.

Markets are already pricing in another possible hike in October, so if you’ve been waiting for some sign to make a move, I wouldn’t wait for a perfect one. There isn’t going to be a moment where everything lines up.

If you want to talk through what this actually means for your specific plans, buying or selling, shoot me a text. I’ll run the real numbers with you, not just the ones in the headlines.