The Fed rate hike is official. On September 16, 2026, the Federal Reserve raised its key interest rate by 0.25%, to a range of 3.75% to 4%. It is the first increase since July 2023. And no, your mortgage rate did not just go up 0.25%. If you are thinking about buying a home in Los Angeles in the next year, here is what actually matters, in plain English.
Not shopping yet? Good. This is exactly when to read this.
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Here is the deal. The headline hits. “Fed raises rates.” Your group chat lights up. Your uncle says wait. Half the buyers I talk to hear that one line and write off the whole year.
Slow down. The Fed headline and your mortgage rate are related. They are not the same thing. I have been selling homes in Los Angeles for 15 years, and this is the mix up I hear more than any other. So let’s clear it up.
Did the Fed rate hike push mortgage rates up 0.25%?
No. The rate the Fed controls is the federal funds rate. That is a short term rate banks charge each other overnight. It moves credit cards, home equity lines of credit and other short term borrowing pretty directly.
So if you are carrying a credit card balance or a home equity line, that one just got more expensive. Pay it down. That part of the headline is real.
A fixed rate mortgage is a different animal. It does not move in lockstep with the Fed.
What actually moves mortgage rates?
The bond market. Fixed mortgage rates follow longer term Treasury yields, especially the 10 year, and the market for mortgage backed securities. Those move on inflation expectations, jobs numbers, economic data and how much investors want to buy.
Markets also move early. Investors price in what they think the Fed will do weeks before it does it. That is why mortgage rates can drop on the same day the Fed raises, sit flat, or climb long before the announcement.
Want one number to watch? Watch the 10 year Treasury. Not the Fed headline.
