October 28, 2026 | By Virginia Fargo, Mortgage Broker | No Hassle Home Loans
What the Federal Reserve's decision to hold rates at 3.75% to 4.00% means for mortgage rates, home prices, and the window of opportunity open to Phoenix and Scottsdale buyers right now.
The Federal Reserve Just Made Its Decision. Now What?
A Reuters poll published October 20 found that nearly all economists surveyed expected the Fed to skip this meeting and then raise rates again in December (Reuters). That remains a forecast, not a promise, and I want you to keep that uncertainty in mind.
This decision sits on top of mortgage costs that are already high. The national average 30-year fixed rate has been running in the low-to-mid 7 percent range through late October, according to the Primary Mortgage Market Survey from Freddie Mac (Freddie Mac PMMS). Rates have also been climbing toward similar levels on Mortgage News Daily's 30-year fixed index, which tracks daily lender pricing (Mortgage News Daily).
Remember that these are national averages, not the rate you will be quoted. Your actual rate depends on your credit score, down payment, loan program, property type, and other qualifying factors.
Here is what I want homebuyers and real estate professionals in Maricopa County to understand: waiting for lower mortgage rates does not guarantee you a better deal on a home.
The Fed's own words tell the story. The statement describes an economy where inflation remains elevated even as economic activity expands at a strong pace. Chairman Warsh put a sharper number on it in his press conference: inflation has been running above the committee's 2 percent objective for close to 6 years (Warsh press conference transcript).
The Fed Doesn't Directly Control Mortgage Rates
A common misconception is that when the Fed raises or lowers its benchmark rate, mortgage rates automatically follow. That is not how it works.
The Fed sets the federal funds rate, which drives short-term borrowing costs for banks. Long-term 30-year fixed mortgage rates track a different set of forces, mainly the 10-year U.S. Treasury yield and the market for mortgage-backed securities (MBS), which are home-loan bundles traded by investors.
That is why mortgage rates can move higher even when the Fed holds its benchmark rate steady, and why watching the Fed's decision alone can mislead buyers. Inflation expectations, economic data, and investor demand all shape the long end of the market where home loans are priced.
The rate you are quoted is personal. It depends on your credit profile, your down payment, the loan program, the property type, and market conditions on the day you lock.
Three Reasons Waiting to Buy Could Cost You More
1. Less Competition Can Mean More Negotiating Power
When mortgage rates stay elevated, some buyers sit on the sidelines and wait. For buyers who are financially ready, that creates an opening.
Homes in many Phoenix and Scottsdale neighborhoods are staying on the market longer, which gives qualified buyers more time to compare properties and push back on price. Depending on inventory and how motivated the seller is, you may be able to negotiate:
A lower purchase price
Seller-paid closing costs
Repairs or repair credits
A seller contribution toward a mortgage rate buydown
Those concessions get much harder to win once buyer demand returns in force.
The advantage isn't just finding a home you love. It's negotiating the terms that make homeownership affordable.
2. Lower Rates Could Bring Higher Home Prices
Many buyers are waiting for mortgage rates to drop before they jump in. The question nobody asks is: what happens when thousands of buyers wait for the same thing?
When rates decline, purchasing power improves and more buyers qualify. If the supply of homes does not grow to match that demand, competition intensifies, multiple offers return, seller concessions shrink, and prices climb.
Here is a simple example. A buyer purchases a home today for $400,000 with a 5% down payment and negotiates $10,000 in seller-paid closing costs. Now imagine rates fall, demand returns, and the same home is priced at $420,000. That buyer faces a higher price, a larger down payment, and far less room to negotiate.
Lower rates do not guarantee higher prices, of course. Employment, housing supply, and local demand all play a role. But the direction of the risk is clear.
The lesson: don't fixate on the interest rate while overlooking the purchase price and the negotiating opportunities sitting in front of you.
3. You Can Often Refinance Later, but You Can't Rewind the Price
Here is a strategy worth weighing. If you buy today with a monthly payment that fits your budget, you may be able to refinance down the road if rates improve, potentially cutting your payment or your term.
Refinancing is never guaranteed. Future rates, home equity, credit, closing costs, and lender requirements all have to line up.
That is why I tell buyers to make sure they can comfortably afford the payment they agree to today, without betting on a future refinance to save them.
You may be able to change your mortgage terms later, but you cannot go back and renegotiate the price you paid for the home.
What This Means for Phoenix and Scottsdale Homebuyers
Real estate is local, and nowhere is that truer than the Valley of the Sun.
Housing conditions across Phoenix, Scottsdale, North Scottsdale, and the surrounding Maricopa County communities can vary sharply by neighborhood, price range, and property type. A luxury home in Arcadia may be drawing competing offers while a new build in a suburban master-planned community sits with room to negotiate. You cannot assume every property is a buyer's market or a seller's market; you have to evaluate each home and its local competition.
For buyers, that means looking well beyond the asking price. Consider the estimated monthly mortgage payment, property taxes, homeowners insurance, HOA dues, closing costs, and any seller concessions on the table. All of it shapes what a home truly costs you.
A knowledgeable real estate agent and a mortgage broker who knows the local market can work together to structure an offer that weighs both the property's value and your financial goals.
In the Phoenix market, the home you can negotiate today matters more than the rate you hope to lock later.
What Should Real Estate Agents Be Telling Buyers?
Agents have a real opportunity right now to help buyers look past the headlines and see the whole financial picture.
Instead of telling clients to wait for rates to improve, help them understand what today's market actually offers. A seller willing to contribute toward closing costs or a temporary rate buydown can deliver meaningful upfront savings that a slightly lower rate may never match.
A seller-paid permanent rate buydown is often worth comparing against a straight price reduction, depending on the buyer's loan structure and how long they plan to stay in the home. Every scenario is different, and the numbers should decide.
When I work alongside agents, here is what I suggest you share with buyers:
Run the real numbers. Compare the full monthly payment and total closing costs against the price, not just the rate in the headline.
Ask what the seller will pay. Concessions, buydowns, and credits are on the table more often than buyers assume.
Pre-qualify now. A prepared buyer can move on a good property while it is still priced and negotiated on their terms.
Look at the exit, not just the entry. If the buyer plans to refinance when rates fall, their loan structure should support that.
The goal is to help buyers compare the options, understand the tradeoffs, and make a decision they can live with, rather than hold out for a rate that may never arrive.
Waiting for the perfect rate can cost you bargaining power today.
My Advice: Focus on the Opportunity, Not Just the Rate
After 15 years in the mortgage business, the same lesson keeps coming up: a good homeownership decision is never made on the interest rate alone.
The purchase price matters. Your monthly payment matters. Closing costs matter. Your long-term financial goals matter. And the ability to negotiate favorable terms can matter just as much as the rate on the loan.
The Fed's October 28 decision is a reminder that predicting mortgage rates is hard. Economists, markets, and even Fed officials disagree about what comes next.
Rather than trying to time the market perfectly, I encourage buyers to figure out what they can comfortably afford and then explore the opportunities that exist today. That is where the real money is saved.
The best time to buy isn't the day rates hit their lowest point. It's when the home, the financing, and the overall financial picture make sense for you.
Let's Build Your Homeownership Strategy
Whether you are a first-time buyer, relocating to Arizona, exploring down payment assistance, or making your next purchase, I can help you understand your financing options.
I will help you compare loan programs, run the estimated monthly payments, and look at strategies that may reduce your upfront costs. For agents, I am happy to work through the numbers on a specific property or buyer so you can present a confident, complete picture.
Ready to find out what you can afford, or what a buydown could do for your client? Let's schedule a no-pressure conversation and build a plan around your goals.
Schedule a call with Virginia Fargo
Virginia Fargo, providing No Hassle Home Loans, the trusted mortgage consultant, home loan advisor in Scottsdale & Across Maricopa County, the leading mortgage broker dedicated to helping consumers save money specializing in home loans, first-time homebuyers, relocation, affordability and self-employed borrower financing.
Virginia Fargo | NMLS #299320 | Empire Home Loans NMLS #1839243 |AZ License: MB-1012019 | No Hassle Home Loans | Equal Housing Lender
Sources and References
Disclaimer: This article is provided for educational purposes only and does not constitute a commitment to lend or guarantee financing, interest rates, future market conditions, seller concessions, or refinancing eligibility. All loan programs are subject to borrower qualification, underwriting guidelines, and applicable requirements. Mortgage rates and market conditions are subject to change.
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