The Fed, Mortgage Rates and the Housing Market: November 2026 Update

Every month I get some version of the same question: "Should I wait for rates to come down?" This month the honest answer is that rates are higher than they were a year ago, the Fed is leaning toward raising them again, and the Austin market is giving buyers more room to negotiate than they've had in years. Here's where things stand, in plain language.

What the Fed did

On October 28, the Federal Reserve held its benchmark rate at 3.75% to 4%. That came six weeks after the Fed raised rates in September, its first increase since 2023. The vote was 10 to 2, and both dissenters, Governor Lisa Cook and Cleveland Fed President Beth Hammack, wanted another quarter-point hike.

The reason is inflation. Consumer prices were up 3.7% from a year earlier in September, pushed up mostly by gasoline and energy costs. Core inflation, which leaves out food and energy, was 2.6%. The Fed also upgraded its description of the economy from "solid" to "strong," which tells you it isn't worried about a slowdown right now.

Fed Chair Kevin Warsh hasn't committed to a next move. As of late October, though, futures markets were pricing better than an 80% chance of another quarter-point hike at the December 9 meeting.

What that means for mortgage rates

The Fed doesn't set mortgage rates directly. They follow the 10-year Treasury, which responds to inflation and to where investors think the Fed is headed. That's why mortgage rates have climbed this year even though the Fed has moved only once.

According to Freddie Mac's weekly survey, the average 30-year fixed rate was 7.18% on November 5, down from 7.24% the week before and the third weekly decline in a row. The 15-year averaged 6.57%. A year ago, those rates were 6.22% and 5.50%.

To put that in dollars: on a $450,000 loan, the difference between 6.22% and 7.18% is roughly $300 more per month in principal and interest.

The national housing market

Nationally, the market is slow but steady. The National Association of Realtors reported that existing-home sales rose 1.5% in September to an annual pace of 3.99 million, which is still 2.2% below last year. The median price was $417,500, up 1.3% from a year ago.

Inventory keeps growing. There were 1.6 million homes for sale, up 4.6% from a year earlier, or 4.8 months of supply. Homes sold in a median of 33 days, and first-time buyers made up 31% of sales. In the South, the median price was $361,000, essentially flat from last year.

The takeaway: higher rates are holding sales down, but they aren't pushing prices down nationally. More homes for sale means more choice, and more room to negotiate.

The Austin market

Austin felt the rate jump more than most places. According to the Unlock MLS September report, closed sales in the Austin metro fell 14.8% from a year earlier, to 2,223. Unlock MLS called the decline significant and a sign of how sensitive buyers are to rate changes.

Prices held up better than sales:

• Austin metro: median price $421,000, up 1.4%; 5.4 months of inventory.
• City of Austin: median price $570,958, up 4.2%; 5.4 months of inventory; active listings down 10.3%.
• Travis County: median price $497,400, up 2.6%; 5.8 months of inventory.
• Williamson County: median price $395,000, down 2.5%; 5.0 months of inventory.

Pending sales in the metro were down just 1.8% from last year, so buyers who need to move are still moving. Inventory has come down a bit from last year, but at more than five months of supply, Austin is still close to a balanced market. Most homes aren't drawing multiple offers, and sellers who price above the market are sitting.

Keep in mind that these are averages. Conditions vary a lot by neighborhood, price point and home type. Westlake and close-in central Austin behave very differently from new-construction communities farther out, where builders are competing hard for buyers.

What I'd tell buyers

• Don't try to time the Fed. If the Fed hikes in December, rates could go up, not down. Buy when the house and the payment work for you.
• Use your leverage. With five months of inventory, it's reasonable to ask for seller-paid closing costs or a rate buydown, which can lower your payment more than a price cut of the same size.
• Look at builder incentives. Many builders around Austin are still offering below-market rates on their own financing.
• Talk to a lender about options, including adjustable-rate loans and refinancing later if rates come down.

What I'd tell sellers

• Price it right from day one. Buyers are payment-sensitive and well informed. Homes priced to the market still sell; overpriced homes sit and end up selling for less.
• Consider offering a rate buydown. It can attract more buyers than a price cut and protect your sale price.
• Presentation matters more in a slower market. Small repairs, paint and good photos make a real difference when buyers have choices.

Questions about your situation?

Every buyer and seller is in a different spot, and these numbers move every month. If you'd like to talk through what this means for your home, your neighborhood or your next move, call or text me anytime.

Chris Harwood, Harwood Realty Group, (512) 387-2708 | chris@harwoodrealtygroup.com

This post summarizes publicly reported information as of November 7, 2026, from the Federal Reserve, Fortune, Freddie Mac, the National Association of Realtors and Unlock MLS. It is not financial advice. Talk with a licensed lender about rates and loan options for your situation.

Sources

• Fortune, "Fed holds rates steady days before the midterms, even as inflation runs hot," Oct. 28, 2026 (https://fortune.com/2026/10/28/fed-rates-steady-midterms-october-3-75-to-4-percent-cook-hammack-dissent/)
• Admirals, "FOMC October 2026: Fed Holds Rates in a 10-2 Vote as Markets Price a December Hike" (https://admiralmarkets.com/analytics/traders-blog/fomc-october-2026-fed-holds-rates)
• Freddie Mac, "Mortgage Rates Decline for Third Consecutive Week to 7.18%," Nov. 5, 2026 (https://www.globenewswire.com/news-release/2026/11/05/3396882/0/en/mortgage-rates-decline-for-third-consecutive-week-to-7-18.html)
• NAR, "Existing-Home Sales Increased 1.5% in September," Oct. 13, 2026 (https://www.nar.realtor/newsroom/existing-home-sales-increased-1-5-in-september-according-to-nar-report)
• Unlock MLS, "September 2026 Central Texas Housing Report," Oct. 13, 2026 (https://www.unlockmls.com/news/september-2026-central-texas-housing-report)