The week we have been bracing for arrived. On Wednesday the Federal Reserve raised its benchmark rate by a quarter point to a range of 3.75% to 4.00%, and on Thursday Freddie Mac reported the average 30-year fixed mortgage jumped to 6.95%, up 19 basis points from 6.76% and the highest weekly reading since January 2025. The 15-year fixed rose to 6.26%. A year ago the 30-year averaged 6.26%, so buyers are paying about seven-tenths of a point more than last September.
Inside the Fed Decision
The vote was unanimous, 12-0, a sharp turn from July's 9-3 hold. The statement said inflation remains elevated and that the increase will support a timelier return to the 2% goal. Chair Warsh told reporters the committee had removed a dose of accommodation because it could not describe financial conditions as restrictive. The new projections are the part that matters for mortgage shoppers: the median official now sees the funds rate at 4.1% at the end of both 2026 and 2027, which implies one more quarter-point hike this year and then a long hold. Officials also raised their 2026 inflation forecast to 3.7% and lowered expected unemployment to 4.1%.
Interestingly, the 10-year Treasury had already done most of the work. It closed at 5.00% on Monday before the meeting, the first time at that level in this cycle, and eased to 4.94% by Thursday. The mortgage market priced the hike in advance, which is why we do not expect another 19-point jump next week unless oil or inflation deliver a new shock.
Housing Data This Week
Thursday's Census report showed August housing starts slipped 2.6% to a 1.275 million annual pace, the second straight decline and the lowest since last October. The same morning, NAR said pending home sales edged up 0.3% in August, with gains in the South and West offsetting declines elsewhere, though contracts were still 4.7% below a year ago. Together with last week's 3.98 million existing-home sales figure, the national market is best described as slow but steady.
Oil at $105
Brent crude traded near $104 to $105 a barrel most of the week after Saudi Arabia's East-West pipeline was knocked offline, then eased slightly Thursday when reports emerged that the kingdom would route more crude through the Strait of Hormuz. Oil is now roughly $37 a barrel above where it was a year ago. Until the Middle East situation stabilizes, energy will keep inflation, and therefore mortgage rates, elevated.
What This Means for Central Utah
First, a little perspective. A 6.95% rate is meaningfully higher than the 6.4% we saw in spring, but on a $300,000 loan, which is close to a typical Sevier County purchase, the difference between 6.76% and 6.95% is roughly $38 a month in principal and interest. Painful, but not a deal-breaker. On a $600,000 Wasatch Front loan, that same move costs twice as much. Affordability in Richfield, Salina, Manti, Ephraim, Nephi and Delta just became relatively more attractive, not less.
Buyers, this is the time to use every tool available. USDA Rural Development loans still allow zero down in most of our communities and often carry rates below conventional quotes. Seller-paid rate buydowns are very negotiable in a market with inventory above 1.6 million homes nationally. And if you can qualify at 6.95%, you will be in a strong position to refinance if rates ever ease; you cannot refinance a house you never bought.
Sellers, the Fed just told the market that rates are staying higher for longer. The buyers still shopping in Central Utah this fall are serious, pre-approved and price-aware. Meet them with a realistic number tied to recent closed sales, consider offering closing-cost help up front, and make sure your listing photos capture our fall colors before the leaves drop. Our team has helped families through 7% rates before, and we would be glad to sit down with you and build a plan that works in today's market, not the one we wish we had.