Potential Fed rate hike could add pressure to already high mortgage rates
Mortgage rates have risen to about 7.43% and could climb further if the Federal Reserve raises its benchmark rate at the September 16 meeting.
As of mid-September, the average 30-year mortgage rate stands at roughly 7.43%, a noticeable increase that raises monthly payments for many borrowers. The Federal Reserve will convene on September 16, and ongoing inflation pressures have revived expectations of a possible rate hike. Fed Chair Kevin Warsh warned that further action may be needed if inflation does not move steadily toward the 2% target.
Although a rise in the federal funds rate does not guarantee higher mortgage rates, it can push up long-term Treasury yields, which in turn affect mortgage pricing. Market participants are watching the 10-year Treasury, which has edged higher recently, for clues. Experts suggest borrowers focus on comparing lenders, evaluating rate-lock options, and ensuring any mortgage fits their current budget rather than trying to time future rate moves.
Why it matters
Higher mortgage rates increase housing costs, affecting millions of prospective buyers and current homeowners.
How this story developed
- Aug 19 Fed officials warn higher rates may be needed if inflation stays elevated
- Sep 8 Iran announced it will double the price of fuel consumed beyond its quota.
- Sep 8 Iran’s Fars news agency reported an explosion heard in the southern Jask area off the Gulf of Oman and east of the Strait of Hormuz.
- Sep 9 The buyback size was increased from $4 billion to $6 billion.
- Sep 10 Oil prices have risen above $95 a barrel amid renewed Middle‑East tensions.
- Sep 10 New reporting highlights a sharp inflation jump and rising fuel costs, reinforcing expectations of a deposit‑rate increase.
- Sep 10 The ECB implemented a 0.25‑point rate increase across its three principal rates.
- Sep 11 Asian stock markets fell on Friday, mirroring Wall Street losses, while Brent crude rose above $108 a barrel as geopolitical strains between the United States and Iran intensified.
- Sep 11 Fed minutes revealed a 9‑3 vote to keep rates near 3.6% and a drop in market odds for a September hike to about 67%.
- Sep 11 August US CPI held steady at 3.4% year‑over‑year and core CPI fell to 2.4%.
- Sep 12 Oil prices rose to just below $109 a barrel as Middle‑East tensions escalated.
- Sep 12 Markets priced in a strong chance of another quarter‑point hike in December.
- Sep 13 Donald Trump told reporters in Ireland that the United States should maintain the lowest interest rate globally, regardless of the Federal Reserve's upcoming decision.
- Sep 15 Trump delivered the remarks at a press briefing during the Irish Open.
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