The Fed Raised Rates. What It Actually Costs a Marin Buyer.

The Federal Reserve raised its benchmark rate by a quarter point yesterday, the first increase since 2023, moving the target range to 3.75% to 4.00%. The Committee’s projections point to one more increase before the end of the year.

Then the bond market did something worth understanding.

In the first hour after the announcement, long-term yields fell. The ten-year Treasury dropped about four basis points, the thirty-year about five. An hour later, during Chair Warsh’s press conference, the ten-year reversed and climbed back above 5%, closing higher than it started.

Same afternoon. Opposite directions. The rate decision pushed long yields down. The words pushed them back up.

If you are buying or selling in Marin, that sequence tells you more than the headline does.

The Fed decision and your mortgage rate are two different things

The Federal Reserve does not set mortgage rates.

The federal funds rate is an overnight rate banks charge each other. A thirty-year mortgage is a thirty-year instrument. What actually drives it is the ten-year Treasury yield. The Federal Reserve Bank of Atlanta has said this plainly: for the past twenty years, mortgage rates have tracked the ten-year Treasury far more closely than the fed funds rate.

Michael DiVita, a Marin mortgage broker who publishes a local rate note, made the same point this week. The fed funds rate and the thirty-year, in his words, can and do move independently.

Yesterday demonstrated it in a single afternoon. The quarter-point increase itself barely registered in the long end of the market, because it had been expected for weeks and was already in the price. What moved the ten-year was Warsh talking about inflation and signaling more increases to come. The mortgage-relevant part of the curve was responding to the outlook, not to the overnight rate.

You do not have to take this on faith. The Fed cut rates by a full percentage point between September and December of 2024. Over that same stretch the thirty-year mortgage went from about 6.08% to 6.84%, and kept climbing to roughly 7.04% by mid-January. The Fed eased for four months and mortgage rates rose the entire time.

Watching Fed announcements to predict your mortgage rate is watching the wrong thing.

So what does a quarter point actually cost

This is the number worth writing down.

A move of twenty to twenty-five basis points works out to roughly $150 to $200 a month on a $1.1 million loan.

That is real money and I am not dismissing it. But set it against what a Marin buyer is actually deciding. It is a fraction of what most buyers spend adjusting their offer price in a competitive situation. It is smaller than the swing between a well-negotiated and a poorly-negotiated purchase. And it is considerably smaller than the cost of waiting for a market that does not wait for you.

Mortgage rates are at a one-year high, with the ten-year Treasury now above 5%. That is the genuine news of this week, and most of the move happened before the Fed ever met.

The part nobody is talking about

While everyone watched Washington, something more useful has been happening here.

Marin’s active inventory is up roughly 24% year over year. That is the deepest selection buyers have had in this county since early 2023.

For three years, the constraint in Marin was not the interest rate. It was that there was nothing to buy. Buyers lost homes to cash offers, waived contingencies they should not have waived, and stretched past their comfort because the alternative was another six months of looking.

That condition has eased. Not vanished, eased.

If you have been waiting for the market to give you room to negotiate, inspect properly, and choose between options rather than fighting for the only listing in your range, that is what more inventory means. It arrived quietly, while attention was elsewhere.

A buyer who secures the right home at today’s rate can refinance if rates fall. A buyer who waits for a better rate and loses the right home cannot get the home back.

For sellers, the number that matters is not the Fed’s

If you are selling in Marin this autumn, the Fed decision is close to irrelevant to your outcome. This is the number that is not:

Homes that sell within thirty days close near 105% of asking. Homes that sit past 120 days settle near 84%.

That is a twenty-one point spread, and it has nothing to do with monetary policy. It is the difference between a property that is prepared, priced, and presented correctly, and one that is not.

With inventory up 24%, buyers have alternatives they did not have last spring. That raises the cost of a mispriced listing considerably. A home that would have absorbed a pricing error in 2024 because there was no competition will not absorb it now.

More inventory does not make it harder to sell a good house well. It makes it much harder to sell an unprepared house at all.

What I would actually do

If you are buying, do not restructure your search around yesterday. Call your lender and ask two questions: what my rate looks like now, and what a lock costs. If you have a lock expiring in the next two weeks, make that call today. Then go look at the additional inventory, because that is where your advantage actually is.

If you are selling, set the Fed aside and look hard at your preparation. With roughly a fifth more competition on the market than last year, the gap between the 105% outcome and the 84% outcome is wider than it has been in three years.

If you are watching, notice how confidently people will tell you what comes next. The Committee has signaled one more increase this year, and even that is a projection rather than a promise. What is knowable is what a quarter point costs and what Marin’s inventory is doing. Both are above.

I am glad to talk through what this means for a specific property or timeline. Reach me here.

This is market commentary, not financial advice. For guidance on your own financing, speak with a licensed mortgage professional.

Frequently Asked Questions

Does a Fed rate hike raise mortgage rates?

Not directly or predictably. When the Federal Reserve raised rates on September 16, 2026, long-term Treasury yields initially fell before reversing higher during the Chair’s press conference. The federal funds rate is an overnight bank lending rate, while thirty-year mortgage rates track the ten-year Treasury yield. The Federal Reserve Bank of Atlanta has noted that over the past twenty years mortgage rates have tracked the ten-year Treasury more closely than the fed funds rate, and the two frequently move in opposite directions.

What did the Fed do in September 2026?

The Federal Open Market Committee raised the federal funds target range by 25 basis points to 3.75% to 4.00% on September 16, 2026, its first increase since 2023. The Committee’s projections indicate one further increase before year end.

How much does a quarter-point rate change cost a Marin buyer?

Roughly $150 to $200 a month on a $1.1 million loan, which is a typical Marin loan size. The effect scales with the loan amount.

Should I wait for rates to drop before buying in Marin?

Waiting carries its own cost. Between September and December 2024 the Fed cut rates by a full percentage point while thirty-year mortgage rates rose from about 6.08% to 6.84%. Buyers who waited for the Fed paid more, not less. A buyer can refinance a rate. A buyer cannot recover a home someone else bought.

How much inventory is available in Marin right now?

Active listings are up roughly 24% year over year, the deepest selection since early 2023.

Is it a good time to sell in Marin?

For a prepared home, yes. Homes selling within thirty days close near 105% of asking, while homes sitting past 120 days settle near 84%. With inventory up 24%, the penalty for mispricing has risen sharply.

About Lauren Hamblet

Lauren Hamblet is a luxury real estate advisor with Coldwell Banker Global Luxury, serving Marin County, San Francisco, and the broader Bay Area. Twenty-five years across the Ross Valley and southern Marin, alongside four generations of San Francisco family history, have shaped her quietly sophisticated, globally informed approach. Learn more about Lauren or contact her.