The Federal Reserve held its benchmark rate at 3.75% to 4.00% on Oct. 28, 2026, six weeks after raising it a quarter point in September. Two officials dissented in favor of another hike. The Fed does not set mortgage rates directly; they follow the 10-year Treasury yield, which has eased since early October.
What the Fed decided on Oct. 28
In its Oct. 28 statement, the Federal Open Market Committee left the federal funds target range at 3-3/4 to 4 percent. The vote was 10-2. Lisa D. Cook and Beth M. Hammack dissented because they preferred raising the range by a quarter point at that meeting.
The Committee said economic activity has been "expanding at a strong pace," that the unemployment rate "has changed little," and that "Inflation remains elevated." It added that "The Committee will deliver price stability." With two members voting for a hike, the statement left the door open to further moves, depending on the data.
How the Fed got here: a September hike
The October hold followed a quarter-point increase at the Sept. 15-16 meeting, approved 12-0, which lifted the range from 3.50%-3.75% to 3.75%-4.00%. The Fed said that action would "support a timelier return" to its 2% inflation goal. CNBC reported it was the Fed's first rate increase in more than three years.
Pressure had been building before September. At the July 29 meeting the Fed held at 3.50%-3.75%, but three officials dissented in favor of a hike. The Mortgage Bankers Association said in mid-October that its forecast assumes two more quarter-point hikes, in December 2026 and the first quarter of 2027. That is a forecast, not a certainty.
What the Fed does and doesn't control
The federal funds rate is an overnight rate between banks. It directly affects short-term borrowing such as credit cards and home equity lines of credit, which are usually tied to the prime rate. A HELOC balance can reprice soon after a Fed move.
A 30-year fixed mortgage is different. Lenders price it off longer-term bond yields, especially the 10-year Treasury, plus a spread for risk and servicing. Those yields reflect where investors expect inflation and Fed policy to go over many years, so mortgage rates can rise before a hike, fall after one, or move without any Fed action at all.
The 10-year Treasury link this fall
This fall shows the connection. The 10-year yield, as published by the St. Louis Fed, rose from about 4.77% on Sept. 3 to a 5.31% close on Oct. 5. Over the same stretch, Freddie Mac's 30-year average climbed from 6.71% to a 7.40% peak on Oct. 8.
Since then the 10-year has eased to 4.86% on Nov. 6, and the 30-year mortgage average has fallen three weeks in a row to 7.18% on Nov. 5. The Fed held its policy rate steady throughout that decline, which shows that bond-market expectations, not the Fed's rate on a given day, drive what borrowers see.
- Sept. 3: 10-year 4.77%, 30-year mortgage 6.71%
- Early October: 10-year 5.31% (Oct. 5), 30-year 7.40% (Oct. 8)
- Early November: 10-year 4.86% (Nov. 6), 30-year 7.18% (Nov. 5)
What this means for Texas borrowers
If you are buying in Texas, the Dec. 8-9 Fed meeting could move bond markets in either direction, but it will not change your rate on its own. What matters is where the 10-year yield and lender pricing sit when you lock. Ask your loan officer how lock periods and float-down options work, and review rate types in our fixed vs. adjustable guide.
Homeowners with a HELOC or other variable-rate debt may feel Fed moves more directly. If a higher-rate environment persists, it may be worth comparing a cash-out or rate-and-term refinance against keeping a variable line. Buyers can check how payments change across rates with our rate calculator, explore conventional loans, or talk to a loan officer. Forecasts are not guarantees, so plan for a range of outcomes.
Sources
- Federal Reserve issues FOMC statement (Oct. 28, 2026), Board of Governors of the Federal Reserve System (October 28, 2026)
- Federal Reserve issues FOMC statement (Sept. 16, 2026), Board of Governors of the Federal Reserve System (September 16, 2026)
- Federal Reserve issues FOMC statement (July 29, 2026), Board of Governors of the Federal Reserve System (July 29, 2026)
- Meeting calendars and information, Board of Governors of the Federal Reserve System (November 10, 2026)
- Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity (DGS10), Federal Reserve Bank of St. Louis (FRED) (November 6, 2026)
- Primary Mortgage Market Survey, Freddie Mac (November 5, 2026)
- Fannie Mae sharply raises mortgage rate forecast for 2027, CNBC (October 14, 2026)
- MBA Forecast: Mortgage Originations to Decrease 5% in 2027 as Mortgage Rates Remain Above 7%, Mortgage Bankers Association (October 14, 2026)
This article is for general information about the mortgage market and is not financial, legal or tax advice. Figures come from the sources listed and may have changed since publication. Rates and averages cited are published market data, not an offer or HomyLoan rates. HomyLoan, LLC is a licensed mortgage broker, Company NMLS 2783307, not a lender. All loans are subject to credit approval and program guidelines. Equal Housing Opportunity.
