If you’ve been watching mortgage rates lately, the last couple of weeks may have been confusing.

The Federal Reserve met on September 16, 2026 and raised the federal funds rate by 0.25%, bringing its target range to 3.75%–4.00%.

But here’s the part that catches many homebuyers off guard:

Mortgage rates were already moving higher before the Fed even made its announcement.

And they continued to move higher around the meeting.

According to Freddie Mac, the average 30-year fixed mortgage rate increased from 6.76% on September 10 to 6.95% on September 17.

So what happened?

Did the Fed raise mortgage rates?

Not exactly.

Understanding the difference is important, because there is a much bigger story developing in the housing market right now. Higher mortgage rates have pushed some buyers to the sidelines, while the number of homes available for sale has increased relative to buyer demand.

That creates an interesting situation:

Financing is more expensive, but buyers who can comfortably afford today’s payment may have negotiating leverage they haven’t had in years.

And if mortgage rates eventually move lower, refinancing could potentially create another opportunity later.

The key word there is potentially.

You should never buy a home today that you can only afford if mortgage rates fall tomorrow.

Let’s break down what is actually happening.

The Fed Raised Rates, But the Fed Does Not Set Mortgage Rates

This is probably the biggest misconception I hear whenever the Federal Reserve meets.

People see a headline saying:

“The Fed raised rates 0.25%.”

And naturally assume that means mortgage rates just increased 0.25%.

That isn’t how it works.

The Federal Reserve controls the federal funds rate, which is a short-term interest rate used in overnight lending between financial institutions.

Thirty-year mortgage rates are determined in the broader bond and mortgage-backed securities markets.

That means mortgage rates can actually rise before a Fed meeting, fall after a Fed rate increase, or move in the opposite direction of the Fed entirely.

Markets are constantly looking forward.

Investors aren’t simply waiting for the Fed announcement. They’re trying to anticipate inflation, economic growth, future Fed policy, government borrowing, geopolitical risks and dozens of other factors that can affect longer-term interest rates.

In September, one of the major concerns has been inflation.

The Federal Reserve itself said inflation remained elevated when it announced its September 16 rate increase.

At the same time, escalating conflict in the Middle East had pushed oil prices higher, contributing to inflation concerns and rising Treasury yields. Reuters reported that those developments were already putting upward pressure on mortgage rates before the Fed’s September meeting.

That helps explain why mortgage rates didn’t simply wait around for the Fed.

The market had already started reacting.

Why the 10-Year Treasury Matters More to Mortgage Rates

If you’re trying to understand where mortgage rates might be headed, watching only the Federal Reserve can be misleading.

One of the more useful indicators to watch is the 10-year U.S. Treasury yield.

Mortgage rates aren’t directly tied to the 10-year Treasury, but the two tend to move in the same general direction because both compete for long-term investor money.

And Treasury yields have been elevated.

Federal Reserve data shows the 10-year Treasury yield around 5% in mid-September, including 5.00% on September 15 and 5.01% on September 16.

When longer-term Treasury yields rise, mortgage-backed securities generally have to offer investors competitive returns as well.

That can translate into higher mortgage rates for consumers.

So when someone asks:

“Why did mortgage rates go up before the Fed raised rates?”

The simple answer is:

Because financial markets don’t wait for the Fed.

They trade on expectations about what is likely to happen next.

Higher Mortgage Rates Have Created Another Effect: Fewer Buyers

Obviously, nobody buying a home is excited about higher mortgage rates.

A higher rate means a higher monthly payment on the same loan amount.

And that has pushed a lot of potential buyers out of the market.

But here’s where the story becomes more interesting.

Those buyers leaving the market haven’t necessarily been matched by sellers disappearing.

In fact, nationally, there are now significantly more sellers than buyers.

Redfin estimated that in August there were approximately 1.53 million sellers compared with 972,000 buyers — meaning sellers outnumbered buyers by roughly 58%. Redfin described it as the strongest buyer’s market in its records, which date to 2013.

That does not mean every neighborhood in Michigan is suddenly a buyer’s market. Real estate is extremely local, and Redfin notes that several Midwest markets remain comparatively stronger for sellers.

But the national shift tells us something important.

Buyers Have Something They Haven’t Had Much of Lately: Leverage

Think back to the housing market a few years ago.

Buyers were frequently competing against multiple offers.

Homes could sell almost immediately.

Buyers sometimes waived inspections, offered significantly over asking price and had very little negotiating power.

Today, the environment is different in many markets.

Higher mortgage rates have reduced the number of people willing—or able—to buy.

For buyers who can comfortably afford today’s payment, that can create opportunity.

Redfin reported that pending home sales recently fell to their lowest level in nearly three years, leaving remaining buyers with more choices, less competition and greater negotiating power.

And we’re seeing another sign of that shift:

Seller concessions are becoming more common.

Redfin reported that sellers provided concessions in 44.7% of U.S. home sales in August, the highest August share in its records going back to 2020. Those concessions can include things such as closing-cost assistance, repairs or other incentives negotiated as part of the transaction.

That creates a very different conversation for buyers than simply asking:

“Are mortgage rates high?”

The better question may be:

“What can I negotiate on the house because fewer buyers are competing with me?”

The Opportunity Isn’t Necessarily the Interest Rate, It May Be the Deal

This is where I think buyers need to look at the housing market a little differently.

Would I rather see mortgage rates lower?

Of course.

But the interest rate is only one part of the transaction.

The price you pay for the house, the amount of competition you face, seller-paid closing costs, repairs, occupancy terms and other concessions can all have a major impact on the overall deal.

When rates were extremely low and buyers were fighting over homes, you may have had a fantastic mortgage rate—but you also might have been competing against 10, 15 or 20 other buyers.

That could mean offering above asking price, limiting contingencies or having very little ability to ask the seller for anything.

Today, higher rates have removed some of that competition.

And for buyers who can afford the payment, less competition can create negotiating power.

What Can Buyers Potentially Negotiate Today?

Every transaction is different, and the amount of leverage you have depends heavily on the property and your local market.

A beautiful house that is priced correctly can still receive multiple offers.

But a home that has been sitting on the market may be a completely different story.

Depending on the situation, buyers may be able to negotiate things like:

• A lower purchase price
• Seller-paid closing costs
• Repairs or credits in lieu of repairs
• Seller concessions that can be used toward an interest-rate buydown
• More favorable inspection terms
• Greater flexibility with closing or occupancy

That is why I wouldn’t automatically look at today’s mortgage rate and conclude that it is a terrible time to buy.

The rate may be worse, while the buying environment may actually be better.

And unlike the purchase price of your house, your mortgage isn’t necessarily permanent.

You Can Negotiate the House Today, And Potentially Refinance the Mortgage Later

This is where the strategy becomes interesting.

Let’s say you find a home you really like.

Because there are fewer competing buyers, you’re able to negotiate a better price or get the seller to contribute toward your closing costs.

You purchase the home with a mortgage payment that you can comfortably afford today.

Then imagine mortgage rates decline a year or two from now.

Depending on your situation, you may have the opportunity to refinance into a lower rate and reduce your monthly payment.

That creates a potential two-step opportunity:

Buy the house when buyer competition is lower. Refinance the mortgage if rates eventually improve.

But there is an extremely important distinction here.

Refinancing Later Should Be a Bonus, Not the Reason You Can Afford the House

I can’t emphasize this enough.

Nobody knows exactly where mortgage rates will be six months, one year or two years from now.

Rates could fall.

They could remain around current levels.

They could even go higher.

There is no guarantee.

So I would never tell someone:

“Don’t worry about the payment. Rates will come down and we’ll just refinance you later.”

That’s not responsible mortgage advice.

Instead, the conversation should be:

Can you comfortably afford this house with the payment you have today?

If the answer is yes, then a future refinance could potentially make an already-affordable payment even better.

If the answer is no, and the only way the house makes financial sense is assuming you’ll refinance into a dramatically lower rate later, you’re taking a risk I wouldn’t recommend.

Think About the Purchase Price and Mortgage Rate Differently

Here’s another way to think about it.

Suppose you wait for mortgage rates to fall substantially.

What happens if thousands of other buyers have been waiting for exactly the same thing?

Lower rates could improve affordability—but they could also bring more buyers back into the market.

More buyers can mean:

more competition for the same houses.

That could potentially put upward pressure on home prices, reduce seller concessions and make bidding wars more common again.

There is no guarantee that happens, either.

But it’s something buyers should consider when deciding whether to wait solely because of interest rates.

You can’t look at mortgage rates in isolation.

You have to look at the entire housing market.

A Lower Rate Doesn’t Automatically Mean a Better Deal

Imagine two different markets.

In Market A, mortgage rates are lower, but you’re competing against multiple buyers and ultimately have to pay significantly above asking price.

In Market B, mortgage rates are higher, but the house has been sitting for several weeks. You negotiate the price, get the seller to contribute toward your closing costs and keep your inspection protections.

Which buyer got the better deal?

There isn’t one universal answer.

It depends on the numbers.

That’s why buyers should stop trying to perfectly time one number—the mortgage rate—and instead evaluate the complete transaction.

Seller Concessions Can Be Especially Valuable Right Now

Seller concessions can be particularly useful in a higher-rate environment.

Instead of simply negotiating the purchase price, a buyer may be able to negotiate seller assistance that reduces the amount of cash needed at closing or helps reduce the mortgage rate.

For example, depending on the loan program and transaction structure, seller concessions may potentially be used toward:

• Closing costs
• Prepaid taxes and homeowners insurance
• Discount points
• Permanent interest-rate buydowns
• Temporary buydowns

Sometimes using several thousand dollars toward closing costs or a rate buydown can have a greater immediate benefit to a buyer than negotiating the same amount off the purchase price.

That’s something we can actually calculate before you write the offer.

Rather than simply asking the seller:

“Will you take $5,000 less?”

We can look at whether that same $5,000 would benefit you more somewhere else in the transaction.

This Is Where Your Realtor and Loan Officer Should Be Working Together

This is one of the biggest reasons I like talking with buyers before they start making offers.

Your mortgage strategy and your purchase offer shouldn’t exist independently of each other.

If your Realtor knows that seller concessions could dramatically improve your financing, that can become part of the negotiation strategy.

If I know which property you’re considering and what the seller may be willing to contribute, I can run different scenarios.

Maybe reducing the price makes the most sense.

Maybe using seller concessions toward closing costs is better.

Maybe buying the interest rate down creates more value.

Maybe you shouldn’t use concessions toward the rate at all.

We can run the numbers and find out.

That’s much better than guessing.

Don’t Let a Headline Make the Decision for You

It is incredibly easy to see:

“Mortgage rates rise after Fed decision”

and immediately decide that buying a house doesn’t make sense.

But that headline doesn’t tell you:

How much competition exists for the home you want.

Whether the seller has already reduced the price.

Whether they’ll contribute toward your closing costs.

How long the house has been on the market.

Whether you can negotiate repairs.

What your actual monthly payment would be.

Or whether buying makes sense for your financial situation.

Those are the numbers that matter.

So, Is This Actually a Good Time to Buy a Home?

There isn’t one answer that applies to everyone.

If today’s payment stretches your budget too far, then don’t buy the house simply because someone tells you rates might fall later.

But if you’re financially ready, have stable income, plan to stay in the home and can comfortably afford today’s payment, the current environment may give you negotiating opportunities that weren’t available when mortgage rates were much lower.

That’s the strange reality of today’s housing market:

Higher mortgage rates are painful—but they’re also one of the reasons buyers may have more leverage.

And if rates eventually decline?

You may have the opportunity to refinance.

If they don’t?

You bought a home with a payment you already knew you could afford.

That’s the way I believe the “buy now, refinance later” conversation should be approached.

Not:

“Buy now because rates are definitely going down.”

But:

“Buy when the home, price and payment make sense today—and consider a refinance later if the market gives you that opportunity.”

What Could Cause Mortgage Rates to Come Back Down?

This is probably the question I get more than any other right now.

When are mortgage rates going to come down?

I wish I could give you an exact date.

Nobody can.

As we discussed earlier, the Federal Reserve does not directly control mortgage rates. Mortgage rates react to the bond market and investors’ expectations about inflation, economic growth, employment and future Federal Reserve policy.

That means several things could eventually help push mortgage rates lower.

Inflation Cooling Down

Inflation continues to be one of the biggest things to watch.

Mortgage investors care about inflation because a mortgage is a long-term investment. If inflation remains high, investors generally demand a higher return for lending money over long periods of time.

If inflation begins moving convincingly lower, that could help Treasury yields and mortgage rates decline.

The opposite is also true.

If inflation remains stubborn or starts accelerating again, mortgage rates could remain elevated or move even higher.

A Slowing Economy

Economic weakness can also put downward pressure on interest rates.

If economic growth slows significantly or the labor market weakens, investors may become more interested in relatively safer investments like Treasury bonds.

Increased demand for bonds can push yields lower, which can also help mortgage rates.

This is why mortgage rates sometimes fall after what would otherwise sound like bad economic news.

For someone losing a job, weak employment numbers obviously aren’t good news.

But from the bond market’s perspective, weaker economic data can reduce expectations for inflation and future interest-rate increases.

What the Federal Reserve Says Matters Too

The actual Fed decision gets most of the headlines, but sometimes the commentary afterward matters just as much.

Markets are constantly trying to determine what the Fed might do next.

Will rates remain higher for longer?

Does the Fed believe inflation is improving?

Are officials becoming more concerned about the economy?

Do they expect additional rate increases?

Those expectations can move Treasury yields and mortgage rates before the Federal Reserve actually changes anything.

That is exactly why trying to time the mortgage market around a Fed meeting can be so frustrating.

The market is usually trying to figure out the next move before it happens.

What Should Michigan Homebuyers Do Right Now?

Instead of trying to predict the exact week mortgage rates will peak or bottom, I think buyers should concentrate on the things they can actually control.

Start with the monthly payment.

Before making an offer, understand what the mortgage payment looks like at today’s interest rate, including principal, interest, property taxes, homeowners insurance and, when applicable, mortgage insurance or HOA dues.

Then ask yourself a very simple question:

Am I comfortable making this payment every month if mortgage rates never come down?

If the answer is no, don’t convince yourself that a future refinance will solve the problem.

If the answer is yes, then we can start looking at the rest of the transaction.

How much competition is there for the property?

How long has it been listed?

Has the seller reduced the price?

Would the seller consider paying some of your closing costs?

Would using seller concessions toward a rate buydown make sense?

Could you negotiate the purchase price?

Those questions may be more important to your actual transaction than trying to predict where mortgage rates will be next month.

Don’t Wait for the Perfect Mortgage Rate

There is another mistake I see buyers make.

They choose an arbitrary mortgage rate and decide they aren’t buying until rates reach it.

Maybe it’s 6%.

Maybe it’s 5.5%.

Maybe it’s 5%.

The problem is that nobody knows when, or even if, that rate will become available.

More importantly, you don’t know what the housing market will look like when it happens.

Imagine rates eventually fall enough to bring a large number of buyers back into the market.

Now you’re competing with people who were sitting on the sidelines waiting for exactly the same thing.

A lower mortgage rate could improve your payment, but increased competition could also mean higher home prices, fewer seller concessions and more multiple-offer situations.

Again, none of that is guaranteed.

The point is simply that waiting for a lower rate does not guarantee you’ll get a better overall deal on a house.

The Better Question: Does Buying Make Sense for You Today?

I think this is a much healthier way to approach the market.

Don’t buy because you’re afraid you’re going to miss out.

Don’t buy because somebody promises mortgage rates are going to fall.

And don’t automatically decide not to buy simply because mortgage rates are higher than they were a few years ago.

Look at your own situation.

If you find the right home, negotiate a price you’re comfortable with and can comfortably afford the payment with today’s mortgage rate, buying may make sense.

Then, if mortgage rates eventually decline enough to justify refinancing, we can look at refinancing the loan.

That’s upside.

It shouldn’t be the financial plan keeping you afloat.

Can You Refinance If Mortgage Rates Fall?

Potentially, yes.

If mortgage rates decline after you purchase your home, refinancing could allow you to replace your existing mortgage with a new loan at a lower interest rate.

Depending on how much rates fall, your loan balance, closing costs and how long you plan to keep the home, that could reduce your monthly payment and potentially save money over time.

But refinancing isn’t automatic.

You’ll generally still need to qualify for the new mortgage, and there can be costs associated with refinancing.

That’s why I don’t like telling buyers:

“Marry the house and date the rate.”

It’s catchy.

But it can also make refinancing sound guaranteed.

I prefer something much simpler:

Buy the house if you can afford the house today. If rates improve enough later, we’ll see if refinancing makes financial sense.

Frequently Asked Questions About the Fed and Mortgage Rates

Does the Federal Reserve set mortgage rates?

No. The Federal Reserve sets short-term monetary policy, including its target for the federal funds rate. Mortgage rates are determined by the broader bond and mortgage-backed securities markets.

Fed policy can influence mortgage rates, but a Fed rate change does not translate directly into the same change in a 30-year mortgage rate.

Why can mortgage rates rise before a Fed announcement?

Financial markets are forward-looking.

Investors are constantly analyzing inflation, employment, economic data and what they expect the Federal Reserve to do in the future.

If investors believe inflation will remain elevated or monetary policy will stay restrictive, bond yields and mortgage rates can move before the Fed makes an announcement.

If the Fed raises rates, will mortgage rates automatically rise?

No.

Mortgage rates could rise, fall or remain relatively unchanged after a Fed decision depending on what financial markets were expecting beforehand and what new information comes from the meeting.

Should I wait for mortgage rates to fall before buying?

That depends on your individual financial situation and the housing market where you’re shopping.

Waiting could result in a lower mortgage rate, but it could also mean facing more buyer competition if lower rates bring additional buyers back into the market.

Rather than trying to perfectly time rates, look at the home price, monthly payment, available inventory and negotiating opportunities together.

Is it smart to buy now and refinance later?

It can be a reasonable strategy if you can comfortably afford the mortgage payment you’re taking on today.

A future refinance should be considered a potential opportunity, not a guarantee.

If the home only becomes affordable by assuming you’ll refinance later, I would be very cautious about buying it.

Can a seller help lower my mortgage rate?

Potentially.

Depending on your loan program and the structure of the transaction, seller concessions may be available to help cover allowable closing costs, discount points or certain interest-rate buydowns.

This is something your loan officer and Realtor should discuss before the offer is written so you can determine how to structure the negotiation appropriately.

Higher Rates Don’t Tell the Whole Story

Nobody likes paying a higher mortgage rate.

But focusing exclusively on the interest rate can cause buyers to overlook what is happening in the rest of the housing market.

There are currently more homes competing for fewer buyers nationally. Sellers are increasingly offering concessions, and buyers in many markets have more negotiating power than they had during the frenzy of the last several years.

That doesn’t automatically make today the right time for you to buy.

But it does mean the decision deserves more thought than simply looking at today’s mortgage rate.

The goal isn’t to find the perfect interest rate.

The goal is to find the right house, negotiate the best transaction you can and make sure the payment fits comfortably within your budget.

If rates improve later, refinancing may give you an opportunity to improve the financing.

If they don’t, you should still be comfortable with the mortgage you have.

Thinking About Buying a Home in Michigan?

If you’re considering buying a home in Michigan and you’re wondering whether today’s market actually creates an opportunity for you, give me a call.

I’ll run the numbers with you before you start making offers.

We can look at different purchase prices, down payments, seller concessions and rate options to determine what actually makes the most sense for your situation.

No guessing about where rates are going.

Just the numbers and the options available today.

BrightSide Lending

More Than a Mortgage. A Brighter Tomorrow.