You’ve probably seen the headlines this week: the Federal Reserve raised interest rates on September 16, and by Wednesday, the average 30-year mortgage rate had topped 7% for the first time in two years.
If you’re trying to buy or sell a home in Maryland right now, you don’t need another wall of economic jargon. You need to know what this actually changes for your monthly payment, your negotiating position, and your timeline.
The short version: rates just moved in the wrong direction for affordability, but that doesn’t mean the market has slammed shut, and it doesn’t mean the same thing for a buyer in Howard County as it does for a seller in Baltimore City.
Here’s what the Fed’s move actually did, why mortgage rates jumped even though the Fed doesn’t set them directly, and what Maryland buyers and sellers should do about it right now.
What the Fed Actually Did on September 16
On September 16, 2026, the Federal Reserve raised its benchmark federal funds rate by a quarter point, to a target range of 3.75% to 4%.
That’s notable for two reasons. First, it’s the Fed’s first rate increase since 2023. After a long stretch of holding steady or cutting, the central bank reversed course. Second, it came under new Fed Chair Kevin Warsh, in what’s being described as his first major move to contain inflation that has proven stickier than expected.
The Fed’s own statement pointed to persistent inflation pressure as the reason for the hike, even as the broader economy shows signs of cooling in other areas. That combination — inflation that won’t fully come down alongside a housing and labor market that’s already showing strain — is exactly the kind of environment that makes affordability harder for buyers and pricing trickier for sellers.
It’s also a politically charged moment. Some officials, including President Trump, have publicly pushed for interest rates as low as 1%, arguing the Fed is moving too slowly to support growth. The Fed’s decision to raise rates instead puts it at odds with that pressure, at least for now.
Whatever your view on the politics, the practical reality for Maryland home shoppers is the same: borrowing costs went up, not down, this month.
Why Mortgage Rates Jumped Even Though the Fed Doesn’t Set Them Directly
Here’s the part that trips a lot of buyers up: the Fed doesn’t set mortgage rates.
The federal funds rate is what banks charge each other for overnight loans. Mortgage rates track the yield on the 10-year Treasury bond, which moves based on inflation expectations, investor demand, and the broader outlook for Fed policy over the next several years, not just this month’s decision.
But in practice, the two are closely linked because a Fed that’s raising rates to fight inflation signals to bond markets that borrowing costs are likely to stay elevated for longer.
That’s exactly what happened this month. The 10-year Treasury yield climbed toward 4.7%, and by September 23, Reuters reported that the average 30-year fixed mortgage rate topped 7%, hitting a two-year high.
Freddie Mac’s weekly survey put the 30-year average at 6.76%, while Bankrate and several other daily trackers showed rates in the 6.97%–7.11% range. The numbers vary slightly by source and methodology, but the direction is consistent: rates are up, and they’re the highest they’ve been since 2023.
What Maryland Borrowers Are Seeing Right Now
Maryland’s average 30-year fixed rate: 7.01%, with 15-year fixed around 6.37% (Bankrate, Sept. 23, 2026)
Freddie Mac’s national 30-year average: 6.76% for the week
Some local lenders are quoting slightly lower rates with points paid upfront, in the 6.25%–6.9% range
If you’re shopping for a mortgage, this spread between lenders is exactly why comparing multiple quotes matters more in a moment like this than it does when rates are flat.
What Higher Rates Mean for Your Monthly Payment
The math on rate increases is easy to underestimate until you run it on an actual home price.
As a rule of thumb, a 1-percentage-point increase in your mortgage rate adds roughly $250 a month to the payment on a $400,000 loan — and Maryland’s median home prices put plenty of buyers in exactly that range or higher.
In the Baltimore metro area, for example, the median sold price recently stood around $399,000, up about 4.2% from a year ago, even as overall inventory has climbed roughly 25.7% compared to last year.
That combination — more homes to choose from, but a meaningfully higher cost to borrow against any of them — is the defining tension of the current Maryland market.
For a buyer, that can mean:
A smaller maximum purchase price at the same monthly budget you had a few months ago
A stronger case for negotiating seller-paid rate buydowns instead of chasing a lower list price
More value in shopping adjustable-rate or shorter-term fixed options if you expect to refinance or move within a few years
For a seller, it means the pool of buyers who can comfortably afford your home at today’s asking price just got a little smaller, which is exactly why realistic, current-market pricing matters more now than it did over the summer.
What This Means for Maryland Buyers Right Now
If you’re house-hunting in Maryland this fall, higher rates don’t mean you should put your search on hold indefinitely. They mean you need to shop smarter.
A few things worth doing immediately:
Get fully pre-approved, not just pre-qualified. In a market where rates can move meaningfully week to week, a real pre-approval, not an estimate, tells you exactly what you can afford and lets you move fast when the right home appears.
Ask about rate buydowns. Many Maryland sellers, especially those whose homes have sat for a few weeks, are willing to fund a temporary or permanent buydown instead of cutting the price outright. It can be a better deal for both sides.
Shop more than one lender. With rates ranging from roughly 6.25% to over 7% depending on the lender and points paid, the difference between the first quote you get and the best one available can be worth tens of thousands of dollars over the life of the loan.
Don’t assume waiting guarantees a better rate. Forecasters are genuinely split on where rates go next, and home prices in many Maryland submarkets are still rising, not falling. Waiting for both rates and prices to drop isn’t a safe bet.
First-time buyers are feeling this shift the most acutely, since they typically have the least room in their budget to absorb a higher payment.
If that’s you, a conversation with a lender about buydowns and down payment assistance programs is worth having before you fall in love with a listing you can no longer comfortably afford.
What This Means for Maryland Sellers Right Now
For sellers, a rate hike doesn’t mean don’t sell. It means price and prepare for the buyer pool you actually have, not the one you had last spring.
With inventory up sharply year-over-year in markets like Baltimore, buyers who are still active are more selective, and they’re doing the math on their monthly payment before they ever get to your front door.
Sellers who are adapting well to this moment are:
Pricing to the most recent 60–90 days of closed comps, not a neighbor’s sale from a lower-rate environment
Offering to help fund a buyer’s rate buydown as a concession instead of holding firm on price
Making sure the home is genuinely showing-ready in the first two weeks on market, since that’s still the window that generates the strongest offers
Staying realistic about the fact that a higher-rate environment tends to favor well-priced, move-in-ready homes over anything that needs work or is priced at the top of the block
The upside for sellers: Maryland’s Association of REALTORS has noted that current rates are still more than a full percentage point lower than where they stood at the start of 2025, and several economists expect some further easing by year-end.
That’s a reason for cautious optimism, but it’s not a reason to price a listing for a rate environment that hasn’t arrived yet.
Where Rates Might Go From Here
Here’s where it’s worth being honest: forecasters don’t agree.
The American Bankers Association’s Economic Advisory Committee expects mortgage rates to stay above 6.8% over the next year, weighing on housing activity into 2027.
At the same time, Maryland Association of REALTORS chief economist Anirban Basu has pointed out that rates are already more than a point below where they were at the start of 2025 and are likely to decline further by year-end.
Both can be true at once. Rates may ease somewhat from today’s two-year high while still remaining well above the 3%–4% range many buyers remember from a few years ago.
The realistic planning assumption for Maryland buyers and sellers heading into 2027 is a mortgage rate environment that hovers in the high-6% to low-7% range, with the potential for modest relief rather than a return to pandemic-era lows.
That uncertainty is exactly why timing a purchase or sale around a guess about future rates is riskier than making the best decision available with today’s numbers — and why working with someone who’s tracking these shifts week to week, not just at the start of a season, matters.
Frequently Asked Questions About the Fed Rate Hike and Mortgage Rates
Did the Fed raise or lower interest rates in September 2026?
The Fed raised its benchmark rate by a quarter point on September 16, 2026, to a range of 3.75%–4%. It was the Fed’s first rate increase since 2023, driven by concerns about persistently sticky inflation.
Why did mortgage rates go up if the Fed didn’t set them directly?
Mortgage rates track the 10-year Treasury yield, not the Fed funds rate. But a Fed that’s raising rates to fight inflation signals higher borrowing costs are likely to persist, which pushed Treasury yields — and mortgage rates — higher too.
What is the average 30-year mortgage rate in Maryland right now?
As of September 23, 2026, Bankrate lists Maryland’s average 30-year fixed rate at 7.01%, with 15-year fixed around 6.37%. Rates vary by lender, credit profile, and points paid, so it’s worth comparing multiple quotes.
How much does a 1% rate increase affect my monthly payment?
As a general rule, each 1-percentage-point increase adds roughly $250 a month to the payment on a $400,000 loan. The exact impact depends on your loan amount, term, and down payment.
Should I wait to buy a home until rates drop?
Not necessarily. Forecasters disagree on where rates go next, and Maryland home prices in many areas are still rising. Waiting for both rates and prices to fall at once is a risky bet. Buying what fits your budget today, with a plan to refinance later, is often the safer approach.
What can sellers do when rates rise?
Price to recent closed comps, consider offering a rate buydown as a concession instead of a price cut, and make sure the home is fully showing-ready in the first two weeks on market, which is when it will attract the strongest offers.
Are mortgage rates expected to keep rising in 2026?
Forecasts are mixed. The American Bankers Association expects rates to stay above 6.8% through the next year, while some regional economists expect modest easing by year-end. Neither a sharp rise nor a return to pandemic-era lows appears likely in the near term.
What’s the difference between the Fed funds rate and mortgage rates?
The Fed funds rate is what banks charge each other overnight and directly affects things like credit cards and adjustable-rate loans. Mortgage rates are priced off the 10-year Treasury yield and reflect longer-term inflation and growth expectations.
Is now a good time to buy a home in Maryland?
It depends on your personal timeline and budget more than on trying to perfectly time the market. With inventory up in many Maryland submarkets, buyers have more negotiating room on price and concessions than they did a year ago, even with higher rates.
What should I ask my lender given rising rates?
Ask about temporary and permanent rate buydown options, whether an adjustable-rate mortgage makes sense for your timeline, and get quotes from at least two or three lenders, since rates can vary by more than half a point for the same borrower.
Why Work With Michael Frank at Frank Oliver Collective at eXp Realty?
Rate environments like this one are exactly when experienced guidance matters most. Knowing when to push for a buydown instead of a price cut, or how to price a listing for the buyers who are actually in the market today, takes more than a rate calculator.
Michael Frank at Frank Oliver Collective at eXp Realty has spent more than 15 years helping Maryland buyers and sellers navigate shifting rate and market conditions with clear, honest guidance.
Michael leads a full-service team that has helped more than 500 families buy and sell homes across Baltimore, Harford, Anne Arundel, Howard, Prince George’s, Montgomery, Carroll, and Frederick counties, closing more than 100 transactions a year.
The team includes dedicated specialists across buyer representation, listing strategy, and client care — including Christian Olson, Mykala Smith, Jerrod Pinkett, Marissa Mohammed, Donnell Jenkins, and Brutus Camara-Coker — backed by more than 200 verified reviews on Google and Zillow.
Whether you’re trying to figure out if a rate buydown makes sense, how to price a listing in a market with rising inventory, or simply whether now is the right time to make a move, Michael Frank at Frank Oliver Collective at eXp Realty can walk you through the numbers for your specific situation.
Ready to talk through your options? Reach out to Michael Frank at Frank Oliver Collective at eXp Realty at frankoliverco.com or liv@frankoliverco.com.
Conclusion
The Fed’s September rate hike and the mortgage rates that followed it don’t change the fundamentals of a smart home purchase or sale — they just raise the cost of getting it wrong.
For buyers, that means getting truly pre-approved, shopping multiple lenders, and asking about rate buydowns before assuming you’re priced out.
For sellers, it means pricing to today’s buyer pool, not last spring’s, and treating concessions as a tool rather than a last resort.
Rates may ease somewhat in the months ahead, but nobody can promise when — which is exactly why making the right move for your situation today, with a clear-eyed read of the numbers, beats waiting on a guess.
If you’re weighing a purchase or sale in this market, Michael Frank at Frank Oliver Collective at eXp Realty is ready to help you make sense of it.
