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Kooky
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About Kooky and Shaka →The Federal Reserve Board published the minutes of the Federal Open Market Committee's meeting of 15 and 16 September 2026 on Wednesday 7 October, at 2:00 p.m. Eastern time. They confirm that the committee raised the target range for the federal funds rate by a quarter of a percentage point, to between 3.75 and 4 per cent, and that all twelve voting members agreed.
For anyone who arranges, sells or depends on a home loan, the more useful lines sit further down the document. The Fed's staff judged that financing conditions were somewhat restrictive for residential mortgage borrowers, and that borrowing to buy a home remained depressed. Housing takes up little room in the minutes, but what is there is plain.
Federal Reserve Board, minutes of the FOMC meeting of 15-16 September 2026, released 7 October 2026. Yields: 2- to 10-year Treasuries, about 35 basis points.
What the committee decided
The minutes set out the decision and the count. The rise of a quarter of a percentage point took the target range from 3.5 to 3.75 per cent up to 3.75 to 4 per cent, and it took effect on Thursday 17 September 2026.
The vote was twelve to none, with no dissent. The minutes list the members who voted for the action as Warsh, Williams, Barr, Bowman, Cook, Hammack, Jefferson, Kashkari, Logan, Paulson, Powell and Waller. A unanimous vote matters to the housing trade for a simple reason: it says the committee was not split on the direction of rates when it met in mid-September.
Alongside the target range, the minutes record the other rates the Fed sets or offers. The Board raised the interest rate on reserve balances and the primary credit rate, and all of these rates sit in a narrow band around the range.
Related readUS mortgage applications fall 4.2% as lenders tighten credit slightly| Rate | Level |
|---|---|
| Federal funds target range | 3.75% to 4% |
| Interest rate on reserve balances | 3.90% |
| Primary credit rate | 4.0% |
| Standing overnight repo rate | 4.0% |
| Overnight reverse repo offering rate | 3.75% |
Source: Federal Reserve Board, minutes of the FOMC meeting of 15-16 September 2026.
None of these is a mortgage rate, and the minutes themselves show that home loan pricing followed another path over the weeks before the meeting.
What the minutes say about home loans
The staff's review of financial conditions draws a line between borrowers. Financing conditions were generally accommodative for larger businesses and for municipalities, the minutes say. For residential mortgage borrowers they were somewhat restrictive. The same document, in other words, describes credit as easy for one part of the economy and tight for households taking out a home loan.
Three further observations complete the picture.
- Residential mortgage rates rose a bit more than 10-year Treasury yields over the period between the previous meeting and this one. Mortgage pricing did not just follow government bond yields up; it moved slightly further.
- Borrowing for home purchases remained depressed. As summarised, the staff are describing a condition that continued, not a new fall.
- Total home equity borrowing stayed near its pre-pandemic levels. Owners drawing on the value of a home they already hold were neither rushing in nor pulling back sharply.
The committee's own discussion touches housing once more. A few participants, according to the minutes, said housing was a sector where financial conditions did not appear supportive, with mortgage rates still elevated. The minutes attribute that remark to a few participants and not to the committee as a whole. The point was made, and the vote to raise rates was still unanimous.
Why borrowing costs rose between meetings
The minutes give a figure for the move in government bond yields. Nominal Treasury yields rose by around 35 basis points across the 2- to 10-year part of the curve over the intermeeting period. A basis point is one hundredth of a percentage point, so the rise was about 0.35 of a point.
The document lists what drove it. Investors expected a higher path for policy rates. Economic data had been strong. Geopolitical developments played a part. There was uncertainty around the Treasury's buyback programme. And heavy private debt issuance for artificial intelligence (AI) infrastructure is cited alongside higher term premiums.
Related readUS: TransUnion and Equifax let mortgage lenders buy scores laterThat last item is worth a second look from a housing reader. The minutes connect the rise in yields to heavy private debt issuance for AI infrastructure. Since the staff also report that mortgage rates rose a bit more than 10-year Treasury yields over the same weeks, the forces listed here are part of the background to what a borrower was quoted in September.
One operational line also concerns the Fed's own balance sheet. The directive adopted at the meeting provides for all principal payments from the Fed's holdings of agency securities to be reinvested into Treasury bills. The entry in the minutes is an instruction, without comment on its effect on home loan pricing.
The minutes say nothing about home prices
As published, the minutes of the September meeting contain no discussion of home prices or of residential investment. Their housing content is about the cost and volume of mortgage credit only. Anyone citing the minutes on where prices are heading is going beyond the document.
The jobs report that followed
Minutes describe a meeting that took place three weeks before they appear. Between 16 September and 7 October, the picture changed, and the main change was the September employment report from the Bureau of Labor Statistics, published on Friday 2 October.
The trade publication HousingWire reported the Bureau's figures that day: payrolls grew by 29,000 in September, and the unemployment rate rose to 4.2 per cent, with 7.1 million people unemployed and wage growth at 3.1 per cent. Redfin, the property brokerage, set the payroll number against what had been expected in an analysis by its head of economics research, Chen Zhao, published the same day.
Source: Bureau of Labor Statistics September employment report, as set out by Redfin on 2 October 2026.
Redfin's analysis adds that the figures for July and August were revised down by 60,000 jobs between them, that the unemployment rate had been 4.1 per cent the month before, and that the participation rate stood at 61.8 per cent. Average hourly earnings rose 0.1 per cent over the month, where 0.3 per cent had been expected.
Related readAustralia: how APRA's debt-to-income limit and buffer cap home loansThe report had its own housing lines. According to HousingWire, construction added 11,000 jobs in September, close to its twelve-month average of 10,000. The detail was uneven. Non-residential specialty trade contractors added 12,300 jobs and residential building added 3,000, while residential specialty trade contractors lost 7,900. Employment in real estate fell by 2,000.
How housing economists read the two together
The minutes show a committee that had just raised rates without a dissenting voice. The jobs report, published five days before the minutes, shows a labour market that slowed more than forecasters expected. Housing economists quoted in the trade press have read the second as tempering the first.
Mike Fratantoni, senior vice president and chief economist of the Mortgage Bankers Association, told HousingWire that the softer jobs data might be enough to keep the Fed on hold at its October meeting. Redfin's Chen Zhao wrote on 5 October that the odds of a rise in October had declined after the weak jobs figures and softer PCE data. Zhao had noted on 2 October that the Fed had forecast one more increase in 2026.
Redfin's analysis also makes an argument that sits well beside the staff's phrase about restrictive mortgage financing: the fast rise in market rates is already doing the work a further rate rise would do. The scale of that rise is given by two sources. Redfin puts the increase in mortgage rates at 1.5 percentage points so far in 2026. Sam Williamson, senior economist at First American, told HousingWire that rates had climbed from roughly 6.5 per cent in July to nearly 7.3 per cent, a move of about 0.8 of a point in a few months.
Related readAustralia's big four banks pass on the cash rate rise from 9 OctoberHousingWire also published, on 6 October, a contributor column by Tim Deibert, president and co-founder of Note Mortgage, on what the quarter-point rise to the 3.75 to 4 per cent range means for buyers and sellers. It is an opinion piece and adds no new data, so it is noted here and not drawn on.
Lawrence Yun, chief economist of the National Association of Realtors, drew attention in the same HousingWire report to a different detail of the jobs data: more Americans are looking for work rather than staying outside the labour force.
Read side by side, the sources agree on the direction. The Fed's staff saw home purchase borrowing as depressed in mid-September, before the weakest of these numbers arrived. On the figures from Redfin and First American, mortgage rates have risen by more this year than the Fed's own quarter-point step.
The order of events is worth keeping straight when the minutes are quoted in a listing presentation or a client call. The committee met on 15 and 16 September. The Bureau of Labor Statistics published its September report on 2 October. The minutes appeared on 7 October. The document therefore describes what the Fed thought before the jobs figures, and it cannot be read as a response to them.
What comes next
Two dates are already fixed. The next consumer price index is due on Wednesday 14 October, according to Redfin. The committee's next meeting is on 28 October 2026. The minutes of that meeting will follow in their turn, and will show whether the staff's wording on mortgage credit has moved.
Fed officials are also speaking in public this week. Redfin's weekly note of 5 October listed remarks during the week by Williams, Bowman and Logan, and by Waller on Thursday 8 October, all four of them among the twelve who voted for the September rise.
For loan officers, brokers and agents, the practical reading of the minutes is narrow but firm. They do not forecast mortgage rates, and they do not say what the committee will do on 28 October. They do record that credit for home buyers was tighter than credit for large companies in September, that purchase lending was weak, and that home equity borrowing was holding at familiar levels. Whether the October meeting changes that description depends on data that is not yet published.
Kooky, from Shaka
Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
