Mortgage Monday - Mortgage Rates Approach 7% Ahead of Fed Meeting

 

Mortgage rates took a meaningful step higher last week, and this week may be even more consequential.

The combination of rising oil prices, persistent inflation and changing expectations for Federal Reserve policy pushed Treasury yields sharply higher. The 10-year Treasury finished last week near 5%, and mortgage pricing deteriorated along with it.

For Tulsa-area buyers and Realtors, the important question is not simply, “What are rates today?”

It is:

Why did rates move, what could happen next, and what can we actually control?

Mortgage Rates Moved Higher—Fast

Freddie Mac reported that its national average 30-year fixed mortgage rate increased to 6.76% on September 10, up from 6.71% the previous week. GlobeNewswire

But Freddie Mac’s weekly survey does not fully capture what happened later in the week.

Mortgage News Daily’s more immediate daily index finished Friday around 7.12%, after rates rose almost one-quarter of a percentage point during the week.

Monday morning’s bond market was not showing a meaningful recovery. The 10-year Treasury was approximately 4.97%, essentially unchanged from Friday. FW: 10 YR Treasury -0.002 ▼002 ▼

Actual mortgage pricing varies by borrower, loan program, credit profile, property, down payment, discount points and lock period, so neither national benchmark should be presented as a guaranteed individual rate.

For a personalized loan comparison, buyers can start with the Oklahoma Mortgage Group home-loan team.

Why Did Rates Rise?

The biggest answer is inflation—particularly energy inflation.

August consumer prices rose 0.4% in one month and 3.4% from a year earlier.

Core inflation, which excludes food and energy, rose 0.3% for the month and 2.4% annually.

Wholesale inflation was even hotter. The Producer Price Index increased 0.4% in August and 5.4% from a year ago. Quartz

At the same time, oil prices surged again.

By Monday morning, crude was trading above $108 per barrel as geopolitical concerns renewed fears about global energy supply. Reuters

Higher energy prices matter beyond the gas pump. Transportation, manufacturing, food production and delivery all become more expensive when energy costs rise.

That can keep inflation elevated—and inflation is one of the biggest enemies of long-term bonds and mortgage rates.

All Eyes Are on the Federal Reserve Wednesday

The Federal Reserve meets September 15–16.

Just a short time ago, many economists expected the Fed to leave rates unchanged.

That changed quickly.

A Reuters poll released Monday found 85% of economists now expect the Fed to raise the federal-funds rate by 0.25% Wednesday, and financial markets are assigning roughly a 90% probability to a hike. Reuters

The announcement comes at 1:00 p.m. Central Wednesday, followed by Chair Kevin Warsh’s press conference at 1:30.

The Fed will also release new economic projections showing how policymakers see inflation, unemployment, economic growth and future interest rates. Federal Reserve

Here is the important mortgage distinction:

The Federal Reserve does not directly set 30-year mortgage rates.

The Fed controls a very short-term overnight interest rate. Mortgage rates are influenced far more directly by mortgage-backed securities and longer-term bonds.

That means a Fed hike Wednesday does not automatically mean mortgage rates rise Wednesday afternoon.

If the market believes the Fed is serious enough about containing inflation, long-term rates could actually improve.

If investors believe the Fed remains behind the inflation problem, Treasury yields could rise further.

Buyers Are Feeling the Affordability Squeeze

Higher rates are already changing borrower behavior.

The Mortgage Bankers Association reported that total mortgage applications fell 2.7% last week. Refinance applications declined 6%, while purchase applications were nearly unchanged.

MBA’s average conforming 30-year rate reached 6.85%.

One number stood out: adjustable-rate mortgages accounted for 8.5% of applications, the highest share since June. HousingWire

That does not mean every buyer should choose an ARM.

It tells us buyers are searching for solutions to the monthly payment.

At Oklahoma Mortgage Group, that means comparing more than one number. Depending on the buyer, the conversation may include fixed versus adjustable rates, conventional versus government financing, seller-paid costs, permanent buydowns, temporary buydowns and available assistance programs.

Buyers who need help with upfront cash can also review Oklahoma down payment assistance programs.

Buyers Are Also Getting More Negotiating Room

High borrowing costs have a second effect: fewer buyers can comfortably afford today’s payments.

Redfin’s newest weekly housing data shows the estimated payment for the typical homebuyer at approximately $2,641 per month, a 14-month high.

Pending sales were down 2.1% from a year ago, while roughly one in five listings had a price reduction. Stock Titan

A separate NAR report released Thursday showed existing-home inventory rising to 1.62 million homes and 4.9 months of supply—the highest months-of-supply level in more than a decade. National Association of REALTORS®

That does not mean every Tulsa seller has lost leverage.

It does mean the days of assuming every house will receive multiple offers simply because it is listed are long gone.

For Realtors, property-specific strategy matters more than broad national labels.

Before Cutting the Price Again, Compare the Financing

Consider a seller debating a $10,000 price reduction.

One option is straightforward: reduce the sales price by $10,000.

But before doing that, the lender can model the same $10,000 as:

• closing-cost assistance,
• a permanent mortgage-rate buydown,
• a temporary buydown,
• prepaid expenses,
• or a combination of price and financing concessions.

When a buyer’s biggest objection is the monthly payment, a financing concession can sometimes have more impact than the same dollar amount taken off the sales price.

That is why Realtors and lenders should work together before the next price change—not after it.

Realtors and builders can learn more about OMG’s partnership resources through our Realtor & Builder Support page.

Mortgage Credit Scoring Just Changed

One of the most consequential mortgage-policy developments last week received far less consumer attention.

On September 9, Fannie Mae expanded VantageScore 4.0 to all Fannie Mae-approved lenders.

Freddie Mac simultaneously announced that VantageScore 4.0 is now broadly available and may be used immediately for eligible mortgages without prior written approval. Fannie Mae

This is a major step in the mortgage industry’s move away from relying exclusively on Classic FICO.

It does not mean every borrower will suddenly have a different score or qualify.

But for borrowers with thinner or more complicated credit histories, it creates another reason not to assume a mortgage answer before the file is actually evaluated.

FHA Is Next—but Not Until January

FHA also announced an important credit-score change last week.

Beginning January 1, 2027, FHA will accept VantageScore 4.0 and FICO Score 10T in addition to Classic FICO for eligible FHA underwriting. HUD

That change is not in effect today.

For borrowers considering FHA now, current FHA rules still apply. Buyers can review the basics on our Tulsa FHA loan page.

Waterstone Expanded Higher-Balance Conventional Options

There was another timely update internally at Waterstone Mortgage.

National MI has confirmed mortgage-insurance support for Waterstone’s increased conforming loan limits, allowing eligible financing above 80% LTV and up to 95% LTV, subject to normal loan, occupancy, property and AUS requirements. Executive Update: Important Update to New WMC Conforming Loan Limits

That may create an additional conventional financing path for some higher-priced buyers who otherwise could be pushed toward jumbo financing.

The distinction is important: FHFA’s official 2026 baseline conforming limit remains $832,750. Some lenders, including Waterstone, are electing to support higher internal limits ahead of the next official FHFA limit announcement. FHFA.gov

If a buyer is near the conforming/jumbo threshold, the best move is to have the scenario priced and reviewed rather than assuming which loan category applies.

What Tulsa Buyers Should Do This Week

Trying to perfectly predict mortgage rates before Wednesday’s Fed announcement is speculation.

A better approach is to control the pieces we actually can control:

Know the payment that works.

Compare the available loan programs.

Understand the true competition for the property.

Ask whether seller concessions are available.

Determine whether buying down the rate makes sense.

And structure the transaction so it works without depending on a future rate drop.

If rates improve later, refinancing may become another option.

But a purchase decision should make sense based on the numbers available today.

For a scenario review or loan-strategy conversation, buyers and Realtors can contact Oklahoma Mortgage Group in Tulsa.

Bottom Line

This week comes down to four big developments:

Inflation remains sticky. Energy prices are making that problem harder.

Mortgage rates are near their highest levels since early 2025.

The Federal Reserve is now widely expected to hike Wednesday.

Buyers have more negotiating leverage—even as financing has become more expensive.

That combination creates a market where financing strategy matters more than ever.

The answer is not simply “wait for rates.”

It is:

Find the path to a payment that works—and use every tool available to structure the deal correctly.