The Fed raises rates to 3.75%-4%, its first hike since 2023: what changes for mortgages, the Euribor and real estate

23/09/2026 – ⏱ 5 min

This article is for informational purposes only and does not constitute investment advice or a recommendation of any kind.

A week after the European Central Bank raised the price of money, the US Federal Reserve has done the same. The Federal Open Market Committee (FOMC) agreed on 16 September 2026 to raise interest rates by 25 basis points, taking them to a range of 3.75% to 4%. It is the first hike since July 2023 and ends five consecutive meetings without change. The decision was taken unanimously, with all twelve votes on the committee, and comes with projections pointing to higher rates for longer. With the world's two major central banks tightening monetary policy at the same time, the cost of financing is once again the central variable for the real-estate market on both sides of the Atlantic.

The decision: 25 basis points and unanimity

The Fed's official statement maintains that inflation "remains elevated" and that the move will support a faster return to the 2% target. The data that preceded the meeting explain the move: US inflation held at 3.4% year on year in August, with 65 consecutive months above target; employment added 162,000 jobs against the 55,000 expected by consensus, and Brent crude was trading above 100 dollars a barrel. Futures were pricing in the hike with a probability above 90%. It is the third meeting chaired by Kevin Warsh, who in August, at the Jackson Hole symposium, had signalled that "there is work still to be done". The decision comes despite public pressure from the White House for lower rates, which has brought the debate over the central bank's independence back to the fore.

The dot plot: at least one more hike and no cuts in 2027

More than the 25 basis points, analysts have focused on the Summary of Economic Projections. The median of FOMC members puts the interest rate at the end of 2026 at 4.1%, compared with the 3.8% estimated in June, which implies one additional hike before year-end. Sixteen of the eighteen participants consider at least one more increase appropriate. For 2027, the median rises to 4.1% from the previous 3.6%, that is, the committee does not envisage cuts next year. In the macroeconomic table, the Fed raises its growth forecast for 2026 to 2.3%, lowers expected unemployment to 4.1% and revises PCE inflation upwards to 3.7% (3.4% core). Several asset managers have highlighted that the institution does not expect inflation to return to 2% until 2029.

What the asset managers say

The first market readings agree that the hike will not be an isolated one, although they differ on the pace. Goldman Sachs Asset Management puts one more hike in December in its central scenario and considers it likely that the Fed will not move rates in October given its proximity to the midterm elections; Julius Baer, by contrast, expects another move in October. Columbia Threadneedle notes that, after the decision, bond traders began to price in three additional hikes through mid-2027. Other voices, such as XTB, question the effectiveness of raising rates in the face of an energy supply shock, which in itself already acts as a brake on consumption and investment.

The first visible effect: the US mortgage nears 7%

The transmission to the US residential market has been immediate. According to Freddie Mac's weekly survey published on 17 September, the average rate on the 30-year fixed mortgage climbed to 6.95%, up from 6.76% the week before and 6.26% a year earlier. It is its highest level since January 2025. The US mortgage does not depend directly on the official rate, but on the yield of the 10-year Treasury bond, which exceeded 5% in the days before the meeting for the first time since 2023. The combination of rising official rates and high long-term yields makes buying more expensive and tends to reduce sales activity, a pattern the US market already experienced between 2022 and 2023.

The European context: ECB, Euribor and the Spanish bond

The Fed's decision adds to that of the ECB, which on 10 September raised the deposit facility rate to 2.50%, its second hike of the year. In Spain, the 12-month Euribor has exceeded 3% and its provisional September average is around 3.1%, almost a point higher than a year earlier, while the Spanish 10-year bond has risen above 4%, its highest since 2013. The Fed does not set the Euribor, but the simultaneous tightening by the two central banks reinforces the expectation of higher rates for longer in global debt markets. A stronger dollar and higher US yields also tend to pull long-term rates in Europe upwards, which are the benchmark for fixed-rate mortgages and for the cost of developer financing.

Why this matters to the real-estate investor

The price of money affects real estate in three ways. The first is demand: more expensive mortgages reduce households' purchasing power and shift part of the demand towards renting. The second is valuation: when the yield on government debt, which serves as the risk-free reference asset, rises, investors demand a higher return from real estate, which puts pressure on valuations. The third is the financing of supply: a developer who depends on bank credit faces higher costs and tougher conditions, which can delay projects or push them towards alternative sources of financing. In Spain, the effect coexists with a market in which prices remain at their peaks and sales have recorded several months of year-on-year declines.

Reading for the investor

These figures should be read with caution. The dot plot reflects the individual projections of FOMC members at a given moment, not a monetary policy commitment, and the Fed itself, under Warsh's chairmanship, has declined to offer guidance on its future path. The outcome will depend on inflation data, the price of energy and the geopolitical situation in the Middle East. The relationship between US rates and the Spanish real-estate market is indirect and operates mainly through debt markets. Past results do not anticipate future ones, and all real-estate investment carries risks of illiquidity, default and total or partial loss of the capital.

In stages of tighter bank credit, part of developer financing has in previous cycles been channelled through alternative formulas, including regulated crowdfunding platforms. This is an observed dynamic, not a recommendation. At European level, the activity of these platforms is governed by Regulation (EU) 2020/1503 and, in Spain, by the implementing rules and supervision of the CNMV.

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