The Fed Raised Rates. Now What?
A Boston real estate market update from the Steph Crawford Group
For the first time since 2023, the Federal Reserve raised interest rates this month. The new benchmark range is 3.75% to 4%.
If your phone has been buzzing with headlines, you're not alone. This is the question we've been answering all week: Does this mean mortgage rates just went up?
The short answer is yes, rates are higher. But the Fed isn't the reason.
The Fed Doesn't Set Mortgage Rates
This surprises a lot of people. The Fed controls short-term borrowing costs between banks. It doesn't set the rate on your 30-year mortgage.
Mortgage rates follow the 10-year Treasury yield. When that yield rises, mortgage rates rise with it. When it falls, rates ease.
Right now, the 10-year has climbed to its highest level in years. That's why mortgage rates have moved so quickly over the last two weeks. The Fed's decision was mostly expected. The bond market had already done the heavy lifting before the announcement.
What Happens Next
The Fed meets again October 27 and 28, so expect another round of headlines. Several Fed officials have signaled another increase could be on the table before year end.
That doesn't mean you should panic. It means you should plan.
Our Advice: Focus on the Payment, Not the Headline
Trying to time the market is a guessing game, and nobody wins it consistently. Not economists, not lenders, not us.
Here's what we tell our clients instead:
Decide what monthly payment works for you today. Start with a number you're comfortable with, then work backward to your purchase price. That number stays steady no matter what the news cycle says.
Talk to a lender now. A quick conversation shows you exactly where you stand at today's rates, and what small shifts in rate actually mean for your monthly budget.
Remember you can refinance later. You can change your rate down the road. You can't go back and buy the home you passed on.
Sellers, price with the buyer's payment in mind. Buyers are shopping by monthly payment right now. Homes priced to meet them there are the ones getting attention.
The Boston Perspective
Greater Boston inventory remains tight, especially in our core neighborhoods like the South End, Back Bay, and Beacon Hill. Higher rates can mean a bit less competition, which gives prepared buyers room to negotiate. The right home at the right payment is still the right move.
Let's Talk Through Your Numbers
Every situation is different. Whether you're buying, selling, or just watching the market, we're happy to walk through what this means for you.
