The Federal Reserve just raised interest rates for the first time since 2023. Here’s how mortgage rates may respond.

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September 16, 2026 / 2:02 PM EDT / CBS News

Prospective homebuyers have been waiting for meaningful relief from the high mortgage rate landscape for much of 2026. Rather than rates dipping, though, borrowing costs have remained stubbornly high instead, with the average 30-year fixed mortgage rate reaching 7.43% as of mid-September, up by a full point compared to just a few months ago. That has kept affordability strained for homebuyers who are already contending with elevated home prices and other rising essential goods costs.

And now another complication has entered the picture. The Federal Reserve just raised its benchmark interest rate by 25 basis points, its first increase since 2023, pushing the federal funds target range to 3.75% to 4.00%. The move follows a stretch of stubborn inflation readings that prompted the central bank to shift back toward tighter monetary policy after previously lowering rates.

That shift puts mortgage rates back in focus at a particularly difficult time for the housing market. Borrowing costs have already been limiting what many buyers can afford, while homeowners who purchased or refinanced…

Original source: https://www.cbsnews.com/moneywatch/