Mortage Rate News
Rates aren’t falling like we hoped, and we’re now underwriting for the possibility that they go higher. For T&T, that means assuming a 7% exit rate, locking pre-sales early, and staying ruthless on timelines so projects still work if the market moves against us.
4 mins read | September 2026
There was no Fed meeting in August, so everything rode on Jackson Hole, and Chair Warsh did not come to make anyone feel good. Here is the setup. July CPI printed soft on August 12, up just 0.1 percent for the month, 3.4 percent year over year, and core down at 2.5 percent. On paper that looks like progress. Warsh looked at a different number. He pointed to PCE running 3.7 percent over twelve months and 4.1 percent over six months, which means inflation is accelerating, not cooling, and he noted 54 percent of the PCE basket is still rising faster than 3 percent. His words were that the Fed must be confident inflation is moving to target clearly and at sufficient speed, and otherwise, quote, we have work to do. Read that again, because the market did. September hike odds jumped from around 30 percent before the speech to roughly a coin flip after, with some venues pricing it higher. Not a cut. A hike. And the reason is sitting in the Persian Gulf. The Strait of Hormuz is effectively closed, with about 10 vessels a day crossing versus 130 before the war, and flow down to somewhere between 7 and 9 million barrels a day from 20 million. Brent hit $89.53 on August 12, up roughly 24 percent since late February. That is a supply shock, it feeds straight into inflation, and the Fed cannot fix it with rate policy.
Meanwhile the 30 year fixed did almost nothing all month, 6.66 percent on July 30 and 6.66 percent on August 27, never leaving a 6.65 to 6.69 band. The real news was Fannie Mae capitulating and raising its forecast to 6.8 percent for the fourth quarter through mid 2027, up from 6.4 percent in July. They deleted the rate decline entirely. So here is what changed for T&T. Last month I told you to stop speculating on rate drops. This month the message is harder than that. You now have to underwrite the possibility that rates go up. Our construction debt floats off prime, so a September hike raises carry on every project already in the ground, mid build, with no way to reprice. That is the exposure nobody talks about. Underwrite your exit at 7 percent, not 6. Lock pre sales with rate locks before dirt moves. And be ruthless about timeline, because in this environment a project sitting an extra 90 days is not a delay, it is a loss. We are building to that assumption. If rates fall we make more money. If they rise we still close.
Written by Hammerhead Capital Inc
