Mortgage Rates at 7.3% and a Hawkish Fed: A Game Plan for San Diego Buyers and Sellers

I wear two hats: Broker Associate at eXp Realty and Loan Officer at West Coast Financial. So I see the rate picture from both sides of the deal. Rates moved fast this fall, and the Fed meets this week, so here's where things stand and what to do about it.

Where Mortgage Rates Are Right Now

According to Freddie Mac's Primary Mortgage Market Survey (Freddie Mac PMMS, Oct. 22, 2026):

• 30-year fixed: 7.32% for the week of October 22, 2026, down from 7.40% the prior week. A year ago it was 6.19%.
• 15-year fixed: 6.68%, down from 6.71% the prior week. A year ago it was 5.44%.

That's a small step down, but rates are still well above where they were a month ago. The 30-year averaged 7.03% on September 24, 7.28% on October 1, and 7.40% on both October 8 and October 15 (Freddie Mac PMMS Archive). The next PMMS release is Thursday, October 29.

Why the dip? Longer-term Treasury yields eased. The 10-year Treasury yield was 5.15% on October 19 and 4.96% on October 22 (Federal Reserve H.15, released Oct. 23, 2026). Mortgage rates tend to follow that yield more closely than they follow the Fed's own rate.

PMMS reflects conventional loans with 20% down and excellent credit. Your rate depends on your situation.

What the Fed Is Doing

On September 16, 2026, the Federal Reserve voted 12–0 to raise its benchmark rate by a quarter point to 3.75%–4.00%, its first increase since 2023 (Federal Reserve statement, Sept. 16, 2026). The Fed's next meetings are October 27–28 and December 8–9 (Fed meeting calendar). Here's what to know going in:

• Inflation is heating up. The Consumer Price Index rose 3.7% over the 12 months ending in September, up from 3.4% in August. Core CPI (excluding food and energy) rose 2.6%, up from 2.4%. Gasoline was up 9.1% for the month and 34.2% for the year. The Bureau of Labor Statistics released the numbers on October 14 (CNBC report on the BLS data, Oct. 14, 2026). The next CPI report is due November 10.
• A pause is the expected call this week. In a Reuters poll taken Oct. 16–20, 94 of 100 economists expect the Fed to hold at 3.75%–4.00% on October 28 (Reuters via Investing.com, Oct. 20, 2026). AFP also reported that analysts expect a hold, with the meeting coming just days before the November 3 midterm elections (AFP, Oct. 2026).
• December looks different. In that same Reuters poll, all 100 economists expect a hike at the December meeting. Almost 60% see the rate peaking at 4.00%–4.25%, while 38 of 92 expect at least two more increases.
• Long-term yields have been volatile. Reuters reported that long-dated Treasury yields hit multi-decade highs on October 7, then pulled back about a quarter point as an October hike became less likely.

The bottom line: don't plan around rates falling soon. Nobody can promise where rates go, and a surprise on Wednesday could move them either way. But the current outlook points to "higher for a while."

Strategies for Buyers

1. Shop the payment, not the price. At today's rates, every $10,000 of price changes your payment. Get a full pre-approval so you know your real budget.
2. Ask for a seller-paid rate buydown. In a market with fewer buyers, sellers are often open to credits. A 2-1 buydown lowers your rate by 2 points in year one and 1 point in year two. A permanent buydown lowers it for the life of the loan. (I covered this in detail in my seller concessions post.)
3. Compare loan types. FHA, VA, and adjustable-rate mortgages (ARMs) can price differently from a standard 30-year fixed. An ARM can make sense if you're confident you'll sell or refinance within the fixed period. Just know the risk.
4. Lock strategically. The 30-year average rose from 7.03% on September 24 to 7.40% on October 8, just two weeks. A rate lock protects you from that kind of move during escrow.
5. "Marry the house, date the rate," carefully. Refinancing later is possible if rates fall, but it isn't guaranteed. Only buy a payment you can live with today.

Strategies for Sellers

• Price for today's buyer. Higher rates mean buyers qualify for less. Pricing at the right level from day one beats chasing the market down.
• Offer a buydown instead of a price cut. A credit used to buy down the rate can lower a buyer's monthly payment more than an equal price reduction does, and it protects your sale price.
• Market to assumable loans if you have one. If you have an FHA or VA loan at a low rate, a qualified buyer may be able to assume it. That's a powerful selling point when rates are above 7%.

Strategies for Current Owners

If you have a low-rate mortgage, a full refinance probably doesn't make sense right now. If you need cash for a remodel or for debt payoff, compare a HELOC or home equity loan with a cash-out refinance. That way you keep your low first-mortgage rate. Keep in mind that HELOCs usually carry variable rates. The bank prime rate, a common benchmark, was 7.00% on October 22, 2026 (Federal Reserve H.15).

A Quick Payment Example

Here's how much the rate matters. On a $700,000 loan, the principal-and-interest payment at 7.32% (this week's Freddie Mac average) is about $4,809 a month. At 6.32%, it's about $4,342. That's roughly $467 a month, or about $5,600 a year. For comparison, the same loan at last week's 7.40% would be about $4,847. This is my own amortization math for a 30-year fixed loan, shown for illustration only, not a quote. It shows why even a temporary buydown or a well-timed lock can make a real difference in your budget.

Frequently Asked Questions

What is the average 30-year mortgage rate today? 7.32% for the week of October 22, 2026, per Freddie Mac. That's down from 7.40% the week before and up from 6.19% a year ago.

Will the Fed raise rates at its October meeting? Most economists expect a hold on October 28. In a Reuters poll taken Oct. 16–20, 94 of 100 expected no change. Nothing is certain until the announcement.

Will the Fed raise rates again in 2026? All 100 economists in that same poll expect a hike at the December 8–9 meeting. Forecasts can change quickly with new inflation data.

Does a Fed hike raise mortgage rates directly? Not directly. Mortgage rates follow long-term Treasury yields and inflation expectations more closely than the Fed's own rate. Those are also elevated right now.

Is a rate buydown worth it? Often, especially when the seller pays for it. I'll run side-by-side numbers for your scenario.

Get Your Personal Rate Plan

Every buyer's best move is different. Call me and I'll run the numbers on a fixed loan, an ARM, FHA, VA, and buydown options for your situation, at no cost and with no pressure.

Rates and forecasts are as of the dates noted and subject to change. This is not a commitment to lend.

Eddie Lagunas, Broker Associate, eXp Realty | DRE #01273510 | 760-521-4880
Edgar "Eddie" Lagunas, Loan Officer, West Coast Financial | NMLS #257063