Monday, September 21, 2026 | Craig Kamman, Edina Realty | Wayzata, MN
Last week the Federal Reserve raised rates for the first time since 2023 — a unanimous 25-basis-point hike that pushed the federal funds target to 3.75%–4.00%. Bond markets reacted fast: the 10-year Treasury touched 5.01% on September 16 before settling back to 4.96% this morning. Mortgage rates followed, with Freddie Mac’s weekly PMMS landing at 6.95% on the 30-year fixed — the highest since early 2025. If you have buyers sitting on the sideline hoping for relief, this is the week to reset expectations.
Current Rate Snapshot
Source: Freddie Mac PMMS (Sept 18, 2026) | Bankrate national survey (Sept 19, 2026)
| Loan Type | Rate | Week-over-Week | Notes |
|---|---|---|---|
| 30-Year Fixed | 6.95% | ↑ +0.19% | Freddie Mac PMMS benchmark |
| 15-Year Fixed | 6.49% | ↑ +0.25% | Bankrate national avg |
| 30-Year Jumbo (>$832,750) | 7.24% | ↑ Rising | Bankrate national avg |
| 5/1 ARM | 6.09% | ↑ +0.18% | Bankrate national avg |
Note: Bankrate surveys daily lender-quoted rates; Freddie Mac’s PMMS reflects contract rates on applications. The two typically differ by 15–25 bps. Both are accurate for their respective methodologies.
Market Context
10-Year Treasury — Six-Month Trend
The 10-year Treasury — the benchmark that mortgage rates shadow most closely — has climbed from around 4.25%–4.35% in April to 4.96% today. That’s a move of about 60 basis points in five months. Yields briefly cracked 5.00% last week post-Fed, a level not seen since late 2023. The bond market is telling you something: inflation is still a problem and traders believe the Fed isn’t done.
Mortgage-Treasury Spread
The spread between the 30-year fixed rate and the 10-year Treasury stands at 1.99% — well above the historical norm of roughly 1.5–1.7%. That elevated spread reflects lender caution: prepayment risk, MBS volatility, and uncertainty about where rates go next. Even if the 10-year stabilized tomorrow, the spread compression needed to get us back to 6.5% mortgages would require significant market calming that isn’t visible yet.
Federal Reserve — What Just Happened
| Item | Detail |
|---|---|
| Sept 16 FOMC Decision | +25 bps hike → 3.75%–4.00% target range |
| Vote | Unanimous 12-0 |
| Dot Plot Signal | 16 of 18 policymakers expect at least one more hike by year-end |
| Next FOMC Meeting | October 28, 2026 |
| Market Odds for Oct 28 Hike | ~59.7% probability of another +25 bps (CME FedWatch, Sept 19) |
The Fed’s own dot plot is the most important signal here. When 16 of 18 policymakers expect at least one more hike, the market is not going to price in cuts anytime soon. Unless inflation data breaks hard to the downside between now and October 28, the bias is higher.
Twin Cities Local Impact
Source: Minneapolis Area REALTORS® (MAAR) Monthly Indicators — June 2026 (most recent published data)
| Metric | June 2026 | YoY Change |
|---|---|---|
| Median Sales Price | $410,000 | ↑ +2.1% |
| Average Sales Price | $492,008 | ↑ +0.8% |
| Pending Sales | 5,171 | ↑ +9.7% |
| Closed Sales | 5,602 | ↑ +10.7% |
| New Listings | 7,268 | ↑ +10.5% |
| Inventory (Active) | 10,897 | ↑ +5.1% |
| Months Supply | 2.8 months | ↑ +3.7% |
| Days on Market | 42 days | ↑ +7.7% |
| Price Per Sq. Ft. | $223 | ↑ +2.0% |
The Twin Cities market is doing something counterintuitive: activity is up significantly year-over-year even as mortgage rates hit new highs. Pending sales jumped nearly 10% and closed sales rose nearly 11% compared to June 2025. New listings are up over 10% — meaning sellers are finally coming off the sideline, which is creating more options for buyers without tanking prices.
The median at $410,000 is still 2.1% above last year. That’s not a price crash — it’s sustained appreciation at a moderate pace. The affordability index sits at 116, essentially flat year-over-year, which means the market is stretching buyers thin but not collapsing demand. Homes are sitting longer (42 days vs. 39 last year), and we’re at 2.8 months of supply — still a seller’s market by definition, but the gap is narrowing.
For my West Metro clients — Plymouth, Minnetonka, Eden Prairie, Wayzata — the dynamic mirrors the metro: inventory has opened up, but quality homes at market price still move. The buyers who are serious are transacting. The ones waiting for 5% rates are watching homes sell out from under them.
Bottom Line / Takeaway
For buyers: At 6.95% on a 30-year, the payment math is real — on a $410,000 purchase with 10% down, you’re looking at roughly $2,450/month principal and interest. That’s not 2021. But here’s the thing: the buyers who paused are competing for the same homes in the same market, often with less leverage. Locking in today gives you certainty. If rates drop 50+ bps in 2027, you refinance. If they climb to 7.5%, you’re protected.
For sellers: The pool of pre-approved buyers is smaller than two years ago, but those who are in the market are committed. Price correctly and your home sells — the June data shows it. Buyers are using their leverage where they can: negotiating inspection contingencies and closing cost credits. Be prepared to work with that if you want a clean close.
For investors / BRRRR buyers: Cap rates and cash flow calculus get harder at 7%+ mortgage rates. If you’re buying in the West Metro, underwrite conservatively. The hold-and-refi strategy still works if you’re buying right and managing the asset well, but the margin for error is thinner. Cost segregation studies on new acquisitions can meaningfully accelerate depreciation deductions and offset cash flow pressure in year one — worth running the numbers on any commercial or multi-family acquisition.
What to Watch This Week
| Date | Event | Why It Matters |
|---|---|---|
| Tues, Sept 22 | Fed Chair Powell speaking (likely) | Any forward guidance on October hike odds |
| Wed, Sept 23 | Existing Home Sales (NAR) | Gauge of actual closed transactions nationally |
| Thurs, Sept 25 | Freddie Mac PMMS Release | Next weekly rate benchmark; watch for 7%+ threshold |
| Thurs, Sept 25 | GDP Revision (Q2 2026) | Stronger economy = more Fed hike justification |
| Fri, Sept 26 | PCE Price Index (August) | The Fed’s preferred inflation gauge — the biggest number of the week |
| Oct 28 | Next FOMC Meeting | 59.7% odds of another +25 bps hike as of today |
The PCE number on Friday is the one to watch. If it comes in hot, expect rates to push toward 7.1–7.2% on the 30-year within days. If it surprises to the downside, there’s a chance the October hike gets repriced out and we see some Treasury yield relief.
Talk to Craig
Questions about what current rates mean for your specific situation — buying, selling, or investing in the West Metro — I’m here. I work with buyers and sellers in Plymouth, Minnetonka, Eden Prairie, Wayzata, Hopkins, St. Louis Park, and Golden Valley.
Craig Kamman
Edina Realty | Wayzata, MN
Call or text: 952-994-4451
Disclaimer: This report is for informational purposes only and does not constitute financial, mortgage, or investment advice. Rate data sourced from Freddie Mac PMMS, Bankrate, and U.S. Treasury. Local market data from Minneapolis Area REALTORS® (MAAR) / NorthstarMLS. Rates change daily — contact a licensed mortgage professional for a rate quote specific to your situation. Craig Kamman is a licensed real estate agent with Edina Realty, Wayzata, MN. Not a mortgage broker or financial advisor.