September 21, 2026 | 2 Minute Read
The Federal Reserve raised interest rates last Wednesday to a range of 3.75%–4%, marking its first rate hike in more than three years.
For real estate investors, the immediate concern is obvious: Will higher Fed rates push mortgage rates even higher impacting exit strategies?
Not necessarily.
While the Federal Reserve’s interest-rate decisions can influence mortgage rates, the two don’t always move together. Mortgage rates are driven primarily by the bond market and investor expectations, which means they can move independently of the Fed’s benchmark rate.
We’ve seen this happen before.
In 2025, when the Fed was cutting rates, mortgage rates went up. In 2017, when the Fed raised rates three times, yet mortgage rates reached their low for the year in September after two of those increases.
That’s an important distinction for investors. A Fed rate hike does not automatically mean your next investment loan will become more expensive.
There’s also a good chance lenders have already priced in some of the expected increase.
So where does that leave real estate investors?
For me, it reinforces the importance of looking beyond interest rates when evaluating a deal.
It’s easy to get caught up waiting for the “perfect” rate. But while you’re waiting, property prices can change, rents can increase, competition can change, and the specific opportunity you’re looking at may disappear.
Research from AD Mortgage makes a similar point. Its nationwide analysis, Does the Perfect Time to Buy Exist?, found that buyers who purchased in 2013, when mortgage rates averaged 3.98%, financially outperformed those who waited until 2015, when rates fell to 3.85%, 84% of the time. The study concluded that mortgage rates are only one part of the affordability equation, along with home prices, savings growth and local market conditions.
For investors, I think the bigger lesson is simple: don’t build your entire investment strategy around trying to predict interest rates.
Instead, I focus on the numbers I can actually underwrite—purchase price, renovation costs, rents, cash flow, financing terms, leverage and multiple exit strategies. If the deal only works because I’m assuming rates will fall next year, it probably isn’t a deal I want to buy today.
Interest rates matter. But they are only one variable in the equation. The best opportunities aren’t necessarily the ones with the lowest interest rates—they’re the ones where the numbers work based on today’s reality, with enough margin to withstand whatever happens next.