09/14/2026
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months. The probability of a September rate hike has jumped to nearly 90% following firm inflation data and rising energy prices. Note: In the lower chart, the 90.7% probability of change means there’s a 9.3% probability the rate will stay the same. Current rate is 3.50%-3.75%. Fed Watch Source
AFTER FOMC MEETING ON: CONSENSUS
Sep 16 3.75%-4.00%
Oct 28 3.75%-4.00%
Dec 9 4.00%-4.25%
Probability of change from current policy:
AFTER FOMC MEETING ON: CONSENSUS
Sep 16 90.7%
Oct 28 51.0%
Dec 9 48.2%
NATIONAL MARKET UPDATE
The housing market continues to tilt toward buyers. Active inventory is 4.2% higher than last year, while the median asking price fell 1.4% to $419,000. More choices and softer prices are giving buyers additional leverage.
Sellers outnumbered buyers by 57.9% in August, the largest gap on record. The imbalance is giving buyers more negotiating power, particularly those who can manage today’s financing costs.
Home insurance costs rose 8.7% from last year and now account for nearly 10% of a typical mortgage payment, adding another affordability hurdle for buyers already dealing with higher borrowing costs.
REVIEW OF LAST WEEK
INFLATION PUSHES RATES...Stocks struggled as oil prices surged and Treasury yields climbed. August inflation also came in firm enough to increase expectations for a Fed rate hike, adding more pressure to borrowing costs.
Oil briefly topped $100 per barrel, raising concerns that higher energy and transportation costs could keep inflation elevated. For housing, that makes a meaningful drop in mortgage rates harder to achieve in the near term.
Despite higher borrowing costs, the housing market continues to give buyers some advantages. More inventory and softer asking prices are creating additional negotiating room for buyers who remain active.
The week ended with the Dow down 1.6%, to 52,573; the S&P 500 down 0.8%, to 7,657; and the Nasdaq down 0.7%, to 26,333.
Mortgage rates have reached a 15-month high as Treasury yields continue climbing. Buyers have more negotiating power on the price of a home, but financing costs remain the biggest obstacle to turning that leverage into a purchase.
DID YOU KNOW...The median price per square foot fell to $222 last week, its lowest level since January. That’s another sign that pricing pressure is moving gradually in buyers’ favor.
THIS WEEK'S FORECAST
THE FED DECIDES...Wednesday’s Federal Reserve decision will be the biggest event of the week for mortgage rates. Markets are now heavily expecting a quarter-point rate increase after stronger jobs and inflation data. Buyers and Realtors should watch what the Fed says about future hikes just as closely as Wednesday’s decision itself. Housing also gets fresh data this week, including housing starts and pending home sales Thursday, giving us another look at how higher borrowing costs are affecting both construction and buyer activity.
Debbie Ratliff
Mortgage Banker
NMLS # 565728
3730 Kirby Drive Suite 1010
Houston, TX 77098
Direct: (832) 962-4418
Cell: (713) 876-8655
[email protected]
www.sentemortgage.com/mortgage-banker/debbie-ratliff/
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