The Fed’s First Hike Since 2023 — The Quick Read: The Federal Open Market Committee raised its target range by a quarter point on September 16, 2026, on a unanimous vote. It is the first hike since 2023, and the committee’s median projection calls for one more before year-end. Short-term investor loans sit closest to that policy rate, so hard money and bridge borrowers should plan on carrying costs staying higher through the rest of the year. As of October 3, 2026, the next meeting is October 27-28.
Key Takeaways
- The Fed’s September 16 hike was unanimous, and the median projection shows one more hike this year.
- Mortgage rates follow the 10-year Treasury, not the Fed directly. Short-term loans sit closer to the policy rate. That is my reasoning, not a measured number.
- I found no neutral public data on average hard-money or bridge pricing after the hike, so I won’t invent any.
- Plan the hold period, the exit and the extension around higher carrying costs through year-end.
- Weak jobs data has not settled whether October brings another hike.
What Changed
The Fed moved. The Federal Reserve’s FOMC statement and implementation note of September 16, 2026, raised the target range by a quarter point, to 3-3/4 to 4 percent. The vote was 12-0. In the same release, the Federal Reserve raised the rate on reserve balances and the primary credit rate by the same quarter point, both effective September 17.
CNBC’s coverage of the decision called it the first hike since 2023. It also noted that three committee members had favored a hike at the July meeting. So the unanimous vote in September was not a surprise to anyone paying attention.
The chair was blunt about inflation. In the press conference transcript, Chair Warsh said the bar for being confident that inflation is moving to target “has not been satisfied.” That is a committee still leaning against price pressure, not one declaring victory.
What comes next? JPMorgan Asset Management’s note of September 17 says the median participant sees the funds rate ending 2026 at 4.1%. It has the median holding there in 2027, with cuts in 2028 and 2029. The headcount of who expects one more hike varies by source. A large national bank counts 16 of 18 participants. PNC’s economics note of September 16 counts 12 of 18. I’d rather not pick a side in a counting dispute. The median says one more hike, and that is the number I’ll use.
Then there’s the jobs report. A published report, released October 2, showed payrolls up 29,000 and unemployment at 4.2%, from 4.1%. CNBC’s report on yields and the jobs data quotes an analyst whose base case is a follow-up hike in December. A companion version of the story says the weak report likely put the brakes on an October hike. Two reads, same data. Nobody knows yet.
How Did Mortgage Rates React?
They rose, by roughly the same amount as the Fed’s quarter-point move, and they did it in a single week. Freddie Mac’s survey showed the 30-year fixed climbing from the prior week for the period ending October 1, 2026, and sitting well above where it stood a year earlier. Fox Business, citing Freddie Mac, called it the highest reading since November 2023.
The Mortgage Bankers Association saw the same thing from the application side. In its survey for the week ending September 25, published September 30, the MBA reported total applications down 6.0%. The Refinance Index fell 9% and sat 56% below a year earlier. The seasonally adjusted Purchase Index fell 4%. The MBA put its 30-year contract rate at 7.3%, up for a sixth straight week.
Here is the catch. Mortgage rates do not follow the Fed’s decision directly. They follow the 10-year Treasury yield. The Fed’s H.15 release, dated October 2, shows the 10-year at 5.17, 5.24, 5.26, 5.29 and 5.24 for September 25 through October 1. The FRED series shows 5.29 for September 30.
October 2 itself is murky. The two CNBC versions disagree on where the 10-year closed that day: one says it fell nearly 6 basis points to 5.18%, the other says it rose almost 5 basis points to 5.281%. I’d wait for the published daily close before quoting either.
One more caution on levels. Mortgage News Daily’s index, a daily measure, showed the top-tier 30-year fixed at 7.54% on October 2, down from 7.60% the day before. That is not the same thing as Freddie Mac’s weekly 7.28%. They measure different things on different days. Don’t line them up as if they were one series.
Why Short-Term Investor Loans Feel It First
Hard money and bridge loans are short-term financing. Investors use them to buy, rehab and sell, or to hold a property until permanent financing is ready. They are built for a hold period of months, not decades.
My reasoning is simple. Short-term loans price closer to short-term rates. A long mortgage prices off the 10-year Treasury, which reflects where the market thinks rates and inflation are headed for a decade. A short-term loan prices off the cost of money now. When the Fed lifts its policy rate, that cost moves with it, and any loan with a floating component moves too.
Now the gap I promised to flag. I found no neutral public source (the Fed, Freddie Mac, the MBA, FRED or Treasury) that reports average hard-money or bridge rates after the hike. The pricing pages that turn up are private lenders’ own marketing. So I won’t tell you carrying costs rose by any specific amount. What I’ll say is directional: the policy rate is higher, the median projection says it goes a bit higher, and short-term loans have little room to hide from that.
Run a plain hypothetical. If a short-term loan’s rate moves from 11% to 11.5% (a made-up pair, not a market quote), that is half a point more on every dollar borrowed for every month the deal stays open. On a project that runs long, the cost compounds with the delay. That is why the hold period matters more now than it did a year ago.
What It Means for Real Estate Investors
The hike lands on a housing market that was already soft. Here is the dated picture.
NAR’s August existing-home sales report, published September 10, showed sales at a 3.98 million annual rate, down 2.0% from July and 1.2% from a year earlier. Inventory stood at 1.62 million homes, a 4.9-month supply. The median price was $429,100, up 1.6%. Investors and second-home buyers made up 15% of sales, down from 21% a year earlier.
That last number matters to this audience. Investor share of sales fell sharply over twelve months. Part of the story is financing cost, and part is a market with more inventory and less urgency.
Other readings point the same way:
- NAR’s pending home sales for August, released September 17, rose 0.3% from July and fell 4.7% from a year earlier.
- Census reported that August new-home sales rose from July, up 6.4%. The agency says both that move and the year-over-year change are within the margin of error. The median new-home price and the months of supply both appear in the same release, which put supply at 8.5 months (Census, September 24).
- Realtor.com’s September report, published September 30, put active listings at 1,161,615, up 5.4% from a year earlier. Homes under contract were down 4.1%. The share of listings with price cuts was 20.8%, the highest for a September since 2018.
More inventory, more price cuts, slower contracts. Buyers have more leverage. As Realtor.com’s Danielle Hale put it, higher rates limit how much of that leverage they can use. I’d say the same applies to investors, only with a short fuse. A flipper buying at a discount today carries the loan while the market digests the same rates everyone else faces.
Here is where I’d push back on one common misreading. “Prices are falling nationally” is too simple. NAR’s median existing price is up 1.6% from a year ago, while Realtor.com’s median list price is down 1.4%. One measures closed sales and the other measures asking prices. Both can be true at once. And the new-home median is mostly a story about the mix of homes sold, with Census warning about margins of error.
My Take
My read: this hike is a cost-of-time story. It is not a death sentence for fix-and-flip or bridge deals. It does change what a deal has to earn.
Carrying cost is a function of the rate and the clock. The Fed just raised the first and told us it may raise it once more. Nobody controls that. What a borrower does control is the second part, how long the loan stays open.
I also think the market is sending a mixed message, and the honest response is to say so. Rising inventory looks like an opening for buyers. Falling investor share of sales looks like a squeeze. Both are in the data. The investors who do well from here will be the ones who price the deal at today’s cost of money and don’t count on a rate cut to rescue a thin margin. The Fed’s own median path has no cuts until 2028.
And the weak jobs report? It is a reason for hope on the October meeting, not a reason to plan around one. Analysts reading the same numbers disagree. I’d treat October as a coin flip and build the deal so it survives either answer.
On the lending side, the picture is more upbeat than the rate story. HousingWire reported a major bank’s research arm forecast of $175B in non-QM originations for 2026, up from $108B in 2025, with DSCR and investor loans roughly half of non-QM collateral. That article carries only an approximate date, so take it as background. A separate report relaying Optimal Blue data, published September 29, put investor and DSCR loans above 35% of non-QM production in August, up from 29% in July 2025. That one is secondary sourcing, so I’d check Optimal Blue directly before quoting it precisely. The direction is still clear: investor-focused lending is a growing part of the non-QM market, even as investor purchases fall as a share of home sales.
What I’d Do Now
None of this is advice to buy or sell a particular property. It is how I’d think about a short-term loan this fall.
Pad the carry. Build your pro forma with interest costs higher than you’d like, then see if the deal still works. If it only works at last spring’s costs, it is not a deal.
Shorten the hold. Every month a short-term loan stays open costs more than it did. Tighten the rehab scope, line up contractors before closing and price the exit realistically.
Have an exit that does not need a rate cut. A bridge loan is a promise to refinance or sell. With the Fed’s median holding the funds rate level through 2027, a plan that depends on cheaper permanent financing next year is a plan that depends on a forecast the Fed itself isn’t making.
Price the extension. Ask what happens if the project runs long, and what an extension costs. Better to know now than at month nine.
Compare quotes on the same day. Rates move week to week, as Freddie Mac’s survey showed. Quotes gathered days apart are not comparable. If you’re collecting several, gather them close together.
If you like it, lock it. A lock fixes the terms for a set period, which takes the next Fed meeting off the table for that file. With meetings on October 27-28 and another after that, I would not float a deal I’d be happy with today. Where floating makes sense depends on the loan structure and your tolerance for being wrong.
Know your options before you need them. Hard money and bridge loans are one tool. If you’re sorting out which structure fits a project, our loan options page carries the current guidelines. If hard money is new to you, here is a plain explainer on what a hard money loan is. First-time flippers can start with this guide to hard money for first-time flippers.
If you’re weighing a purchase or a refinance this fall, Lendmire can walk you through how the current programs fit your file.
For the end-to-end picture of how these loans work — qualification, structures, and the full process — see Lendmire’s complete DSCR loans guide.
Frequently Asked Questions
Did the Fed’s hike raise mortgage rates?
Not directly. Mortgage rates track the 10-year Treasury yield, not the Fed’s decision. Freddie Mac’s survey showed the 30-year fixed rising 25 basis points in the week ending October 1, to 7.28%, but the hike was widely expected. The 10-year’s moves around the meeting did more of the work. Short-term loans are different because they price closer to short-term rates.
Will the Fed hike again in October?
Nobody knows. The median projection calls for one more hike this year, and the next meeting is October 27-28. The September jobs report was weak, and analysts quoted by CNBC split on what it means: one read says it puts the brakes on an October move, another has a follow-up hike in December. I’d plan for either.
How much more will my hard money loan cost?
I can’t give you a number, and neither can any neutral public source. I found no Fed, Freddie Mac, MBA or Treasury series that tracks average hard-money or bridge pricing. The reasoning is directional: short-term loans price closer to the policy rate, so carrying costs should stay higher through year-end. Your actual cost depends on the loan, the property and the lender.
Is this a bad time to flip a house?
It is a harder time, not a closed one. Investor and second-home buyers were 15% of NAR’s August sales, down from 21% a year earlier, and price cuts hit 20.8% of listings in Realtor.com’s September report. Margins have to cover higher carrying costs and a buyer pool with more leverage. Deals priced at today’s costs can still work.
Are DSCR and investor loans still growing?
The volume data say yes. A major bank’s research arm forecast, reported by HousingWire, put 2026 non-QM originations at $175B, up from $108B in 2025, and Optimal Blue data relayed in a September 29 report show investor and DSCR loans above 35% of non-QM production in August. Opinion pieces warn of rising risk, so treat the growth as real and the risk as a live debate. Program details are subject to lender guidelines.
About Lendmire
Lendmire (NMLS# 2371349) is a non-QM mortgage brokerage arranging DSCR investor loans in 41 markets — 40 states plus Washington, D.C. — and consumer mortgage programs, including bank statement, HELOC and down payment assistance options, in 16 states through wholesale lenders. Lendmire is the broker, never the lender; every file is underwritten by the lender under its own guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Many investors treat hard money as the acquisition tool and plan the exit up front – see refinancing out of a hard money loan with a DSCR loan.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Federal Reserve FOMC statement and implementation note, September 16, 2026
2. CNBC, Fed rate decision, September 16, 2026
3. Federal Reserve press conference transcript, September 16, 2026
4. JPMorgan Asset Management, FOMC note, September 17, 2026
5. CNBC, Treasury yields and the jobs report, October 2, 2026
6. Fox Business, Freddie Mac mortgage rates, October 1, 2026
7. MBA Weekly Applications Survey, September 30, 2026
8. NAR existing-home sales, August 2026
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Listings Swell And Sellers Blink: Buyers Gain Negotiating Room This Fall · Five Rentals, Five Loans: Why Bundled Collateral Costs Investors Later · The Big Cash-out Refinance Is The Cleanest Loan In Lending
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.