Mortgage Rates Are Pushing Past 7%

The Sell for 1 Percent team breaks down the impact of the latest quarter-percent Fed rate hike on Central Ohio. With the 10-year treasury crossing the 5% psychological barrier, conventional mortgage rates are now pushing into the seven to seven-and-a-quarter percent range. This is creating a tale of two markets locally—the best-finished homes still see multiple offers, while others sit longer, giving buyers more leverage on inspections and closing costs. For Columbus homebuyers, the active inventory is up over 6,300 listings, offering more choice but requiring careful navigation of these higher borrowing costs.

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Full Transcript

Hello there, everyone. Jaime with Sub for 1 Percent Realtors. Nice hat, Jaime.

We are back once again. He didn’t get out of bed? It’s very dark in that room. He just rolled over, threw the hat on, and said, hey, everybody.

You guys told him to go, and now you’re giving him a hard time. You could have discussed his wardrobe earlier. Nah.

Go, go, go, go, go. Look at the disgust on his face. Are we going to keep going with this one? Well, sure.

All right. This is what the people want. One take, everybody knows the rules.

It is September 17, 2026. We are here to discuss the recent Fed meeting, how it affects the mortgage world, the real estate world, the entire world coming to an end. Everything’s gone.

Yeah, and the real estate market here in central Columbus in general. Central Columbus. Central Ohio, yeah.

Central Ohio. Oh, boy. Someone mute him.

We have, as usual, Rich Cercone with Highlands Mortgage here with us to give us a little breakdown of what he’s seen. Hey, Rich. How you boys doing? So, yeah, so this is September 17th.

On September 16th, the Fed announced a one-quarter percent rate hike. The markets expect another rate hike before the end of the year and another rate hike sometime next year, minimal. And so Kevin Warsh, the new Fed president, said either yesterday or this morning, I’m not sure, I’ve lost track, that inflation has been too high for too long and he’s going to do something about it, which means higher rates to fight inflation.

All that, to the people watching, what that means to you is sevens in front of your mortgage rates. Oh, boy. You know, we may still get to a high six on a first-time homebuyer, perfect-time type of loan, but for the most part, we’re high sixes at least, and in most cases pushing seven, somewhere in the seven to seven and a quarter range on the general 20% down average conventional type loan.

So I think, you know, there’s no end in sight to this. It’s not a situation where, well, you know, we’re going to go through this and probably by next spring rates will be down again. The geopolitical landscape is not really lending itself to any kind of a prognostication like that.

So, you know, if you need a house, if you need to buy a house because you’re bursting at the seam with your family and, you know, you’ve got another child and you need another bedroom or a different school district, then, you know, you’ve got to just go ahead and buy that house and then deal with the lower rates when they come on a refinance. But, you know, there’s no promises as to when exactly that will be. Lots of fun.

Yeah. Well, I think we all know, not think, the .25 was baked in yesterday. Yeah.

And but then Warsh’s comments after the announcement impacted the market terribly bad. I mean, we saw things dump almost as soon as he started talking. And then we saw a, you know, a comeback and then fall back off again.

Yeah. And this we’ve got a rally this morning. The stock market’s rallying.

The bond market has dropped. We were over 5% on the 10-year treasury. We’re at $4.95 as we speak right now.

We’ve been as high as $5.03, $5.02 yesterday. So we have crossed over that 5% range, which is a psychological barrier. That’s a place that we didn’t want to see the 10-year treasury go to.

We’ve dropped back down below it. Let’s see if we can hold down below it. But it looks like we’re going to probably, as things start to creep, we’re probably going to see a pattern of the 5% plus 10-year treasury bond, which leads to 7% plus mortgage rates usually.

We had a little bit of a barrage of financial news this morning. We had the Philly manufacturer number come out. We had employment come out.

And there was something else that dropped here. Yeah, the weekly jobless claims come out every Thursday. They’re not as big a barometer as the monthly non-farm payroll report.

They showed a little bit of softening where there wasn’t as many jobless claims. The jobs were a little better than expected. The Philly Fed index was a little higher than expected.

I don’t know. It seems like everything, though, is dependent on what is happening in the Middle East. We’ve got gas prices continuing to go up.

Dave, you can comment on that later. I guess the Hoodies blew up a Saudi pipeline or at least took control of a Saudi pipeline that was moving gas away from the Strait and getting out into markets. So, we’ve got more pressure on oil and all that.

It bounced over on Monday up to $110 a barrel, and it just came back below $100 a barrel here this morning. Well, hey, that’s great, but I just filled up for $459. Well, obviously, your gas station did not get the word.

My gas station, on the other hand, is at $439. Well, that’s a great price for being under $100 a barrel. Listen up, people.

It’s not all bad. You and Rich are all doom and gloom. I’m not.

Listen, there’s going to be economic disaster soon, and that will force them to print money, and that will cut rates. So, just relax. There you go.

It’ll all work out. We will have total economic collapse and rates will get down into the fives. You’re talking about us being doom and gloom.

Yeah, waiting on the October surprise, whatever that may be. Here it comes. I know it.

I’ve got all kinds of theories for you on what the surprise is, and who cares? I didn’t even know they raised rates. You knew they were going to. The crazy thing is this year started with them saying, oh, we’re going to drop rates three, four times, five times, five rate drops.

And I remember making the joke back then, that’s the propaganda arm of the Realtor Association that’s telling you that. Here we are. Well, we were headed that way until, what was it, May? That we started this war in Iran? It was never going that way.

I don’t know. What were our rates in February, Rich? Low fives? Right before the February 28th invasion into Iran, we were just crossing below the six percent range. Sixes, I’m sorry.

We were low sixes and crossing into the fives, and it was looking optimistic. And then when the war started, things kind of changed gradually here, where we are now. With Fed policy, getting below five and three quarters is going to be a challenge.

The job market has to break to do that. It was never going down to the low fives. Well, I think the big thing that we are experiencing is gasoline, oil plays a huge part in our day-to-day lives, whether it be all the plastic that’s in that car that you’re driving, Jay, the gasoline you put in your car, the transportation of goods and food and whatever across the country, it’s all impacted by high gas prices.

And so when you’re paying $4.50 a gallon, it’s going to impact everything, which causes inflation. So if they, not we, because I’m not in control of anything, I was able to buy a 55-gallon drum of gas when it was back at $3.50, so I feel pretty good about myself. Unfortunately, all the detergents and the low-quality gas you bought, it’s no longer good, but that’s okay.

They do make a thing called gas saver, and you put a few drops in per gallon. Anyways, long story short is, I think it’ll get back to normal when? I think they were hoping that this would have been over by March, April, and now it’s dragging into September, October, and it’s going to impact the elections coming up here in November. I’m very certain of that.

So we’ll see. With all this stuff, my personal opinion is that there was issues that became almost like it was made personal with the Federal Reserve, with the current administration, and they were never going to do anything to drop rates. It is not going to happen.

And I think that between Walsh, who is this administration’s guy, coming out and talking, or the president saying things like, well, this will end after midterms, there’s just a lot of self-inflicted wounds that are happening here where you’re not going to get any relief. So it’d be nice if it wasn’t that way, but it is what it is. And as a result, we are seeing..

You and I, Jay, we’ve talked about this at length, Jaime, I think a little bit with you as well, that when the people are fat and happy, then they’re willing to go along with things. But I think right now people aren’t fat and happy. They’re paying $4.50 a gallon for gas.

The barometer, the McDonald’s cheeseburger price is up. People are feeling the pinch because their income is not rising as quickly as these prices are. And so there’s going to be a price to pay.

And it will get back to whatever normal is. I kind of thought that $6.50 was kind of the new norm. We were seeing here in the real estate market, Jay, you got a number of listings, Jaime, with the buyers.

We were kind of seeing the market pick back up here about even three, four weeks ago when interest rates were hanging around $6.50. But now we’ve got them bumping up against $7.00 and maybe just over $7.00. And we’re seeing things slow a little bit.

Jay, you just said something before we came on camera that of all the listings that you have, and if I heard wrong, tell me, but I think you said you have no showings requested for today? I had one requested today, but it got declined. So that one kind of stinks. And what I was trying to say a minute ago was all this kind of leads into across the board, the market kind of grinding right now.

I tell all my sellers, anytime the interest rates go above, the line in the sand, according to Logan Motoshami, is right around 6.65%. And anytime it goes above that level, you feel the market kind of, you know, buyers pull back a little bit. And so that’s separate from the 7% psychologically.

But me and Rich were talking yesterday, I think, and it’s like in 2023, they went up to 8%. And I remember that. And it’s like, you know, and things kind of were grinding down and slowing down.

And I told Rich, I said, it feels kind of similar to that market. And that was the last time this time of year in 2023 that we were in an environment where rates were going up. In 24 and 25, the September, October rates typically have been coming down.

So it’s flipped up a little bit here. And Rich made the comment to me that it’s different this time because of the conflict with Iran and just what’s going on. So we’ll see.

We’ll see how this all plays out. We are around 6,300 active listings. 6,335, I think, is the number I saw this morning.

So they’re growing. But then, you know, I’m out on appointments the other day. There was one house in particular.

The finishes were exceptional. And it had multiple offers. So it’s not like the market’s dead.

No. And I’m still selling things. I’ve got I’m expecting, you know, two or three of them to sell today waiting on offers.

Yeah. I was just looking here real quick. New listings.

There was 1012 in the last week. The solds that have closed were 665. So we are listing about twice as many as we’re selling.

And so that’s why you’re seeing a little bump, I think. Last week you’re around 6,100 listings. Now you’re at 6,300 plus.

And so there’s a little bit of a divergence there. It used to be a little more even. List 1,000, sell 1,000.

Now you list 1,000, sell 665. So we’ll see. Jaime, on the buyer side, more choice.

That’s good for buyers. Interest rates aren’t so good for buyers. But what do you see, Em? Yeah, I think still the opening weekend is where you’re going to see, you know, multiple offers if a property is going to get them.

So houses that have, like Jay said, exceptional finishes and are priced properly to get the right, you know, attention and, you know, traffic for buyers. I’m still seeing multiple offers in those situations. Nothing, you know, out of control crazy.

But if somebody wants a property, they’re going to, you know, at least get the advice from us on how you become the owner of that property. So other than that, yeah, I mean, buyers that are looking to find a nice deal, there’s I think a lot of deals out there at the moment. Houses that, you know, have been on the market a little while, that you have a little more flexibility when it comes to closing costs, inspections, getting remedies done.

So it’s chugging along. Like we said, you know, leading into before this conflict in Iran, I think, you know, interest rates were looking positive, but as things ticked up, you know, I’m seeing a decent amount of showings at the moment for some of my listings. Now, some of them have recently had price adjustments, and I think we’re starting to gain some traction in our, you know, overall, I mean, it’s still a pretty competitive market out there, really depending on, you know, your objectives as a home buyer.

But at the same time, there are things that have been sitting on the market a while that, you know, if you want to get seller closing costs, if you, you know, want to get a certain program done, I think sellers are negotiable on that end. So a little bit of a tale of two markets on the buy side. All righty.

Any last words there, Richard? I know you mentioned gasoline and we’ve all talked about I’m seeing, yeah, 459. My BJ’s here on 23 is 429. I saw.

So they’re usually 20, 30 cents cheaper, you know, and I think we talked about this once before. Giant Eagle has a program that if you tie your giant Eagle card to your credit card that you get like a 20, 30 cent reduction in your, in your gas price per gallon. So just a FYI, keep that in mind.

With that low quality gas. Hey, it gets you around. So your car explodes all conked up.

Costco has clear gas at a discount price. Yeah. I’ve not had any problems, but I was talking to my son yesterday, Jackson, we were coming home from baseball.

And he made a comment about how much money I was putting into the car. He saw the, the, the gas on the, whatever it is, the gas dispenser. He saw the dollar signs and he said, that’s all.

He says a lot of money, dad. And then he said, he said, I said, yeah, it’s four 59, buddy. It is a lot.

And he goes, diesel was $6. He goes, coach Russ is cooked. And I said, coach Russ drives diesel.

He goes, yeah, he drives a truck. Trucks are diesel, dad. Okay.

But if you drive diesel, according to Jackson, you’re cooked. Yep. Let’s get Jackson on our video next week.

There you go. So easy. A third grader understands it.

There you go. What was that? Gas prices are too damn high. Are you smarter than a fifth grader? Anyways.

So, so over under on $5 before end of the weekend. Under. Easy.

You want a dollar bet on that one? Since you’re saying under, I’ll say over. All right. You already owe me a dollar for inventory going above 6,000 this year.

That was an easy call. I mean, you think at a certain point, you’d start to like, listen. It has.

It has legitimately gone over 6,000. Yes, it has. This is true.

And I’d like to thank the federal government for costing me a dollar. That’s going to be written on there. Oh, they’re going to cost you a lot more than a dollar, buddy.

Yeah. Yeah. I’m trying not to.

I’m trying not to tap into my oil reserves, but I might have to. You get your 55 gallons. Dave has a reserve.

Yeah. He has a strategic oil reserve himself in these economic times. Just in case.

All right. Take us on home here, fellas. I appreciate you guys being on and discussing the greater market sentiment at the moment.

If you guys enjoyed this content, please give us a comment. Let us know what you think, who you agree with, over or under on $5 a gallon here. Please like, share, and subscribe.

We will be back next week when the AI alien takeover really disturbs the We’ll chat more then on how that affects real estate. Have a good one, fellas. Thank you.

Thanks, guys. See you, guys.