I’ve been originating mortgages in Marin County and the Bay Area for over 20 years. I’ve worked through the 2008 meltdown, the COVID-era sub-3% anomaly, and the brutal 2022–2023 rate spike. Last Tuesday, the Federal Reserve raised its benchmark rate by 25 basis points to a target range of 3.75%–4% — its first rate hike since 2023. And my phone has been ringing ever since.
So let me just say plainly what I’m telling my clients: this is not a crisis. It is, however, a moment that separates the prepared from the panicked — and right now, preparation wins.
What Actually Happened on September 16th
The FOMC voted 12-0 to hike. That unanimity matters — this wasn’t a squeaker. The committee cited inflation still running above target, resilient consumer spending, strong productivity growth, and geopolitical pressures contributing to energy prices. The Fed also telegraphed the possibility of another hike before year-end if inflation doesn’t cool.
What followed was predictable: the 10-year Treasury yield jumped, and 30-year fixed mortgage rates crossed 7% within 48 hours. As of this writing, the Freddie Mac average is sitting at 6.95%. My best-priced conforming locks this week are coming in at 7.00%–7.125%. Jumbo is slightly better — 6.875%–7.00% for well-qualified buyers in Marin.
The Honest Reality for California Buyers
A 7% rate on a $1.2M purchase with 20% down puts your principal and interest payment at roughly $6,394/month. That same loan at 6.5% was $6,066 — a $328/month difference. That’s real money, and I’m not going to pretend otherwise.
But here’s the context most people are missing: Marin County’s active inventory just hit 486 listings — up 24% from a year ago. That’s the most selection buyers have had since early 2023. Homes are averaging about seven weeks on market. Sellers who priced on 2022 comps are sitting. And that gives a well-prepared buyer something they haven’t had in years: leverage.
I had a client close last week on a Corte Madera property. Listed at $1.475M. She got it at $1.41M with 2 points in seller concessions — essentially a seller-paid rate buydown that brought her effective rate to 6.375% for the first three years. In a 2021 market, that conversation never happens. Right now, it does.
Why the Fed Doesn’t Actually Set Your Mortgage Rate
This is the thing I explain constantly. The Fed controls the overnight lending rate between banks. Your 30-year fixed mortgage is priced off the 10-year Treasury yield, which responds to Fed policy — but also to inflation expectations, economic data, and global capital flows. They move together, but they’re not the same thing.
In fact, the bond market had largely priced in this hike before it happened. Which is why rates moved as much before the announcement as after it. If the October inflation data comes in softer than expected, I wouldn’t be surprised to see the 10-year pull back and 30-year rates dip toward 6.75% — even before the Fed does anything else.
Three Strategies I’m Actually Using Right Now
1. Temporary rate buydowns negotiated as seller concessions. On a $1.2M purchase, 2 seller-paid discount points equals $24,000 applied toward a 2-1 buydown — lowering your rate to roughly 5% in year one, 6% in year two, 7% in year three. By year three, either rates have come down and you’ve refinanced, or you’ve had two years of cash flow relief while you got established in the home. This is the single most powerful tool in the current market for CA buyers.
2. 5/1 and 7/1 ARM products for high-net-worth Marin buyers. Jumbo ARMs are pricing 50–75 basis points below 30-year fixed right now. For a buyer who has a realistic 5–7 year time horizon in the property — which describes a lot of move-up buyers in Tiburon, Belvedere, and Mill Valley — an ARM dramatically reduces the monthly carry. Yes, there’s rate risk after the fixed period. That’s what the rate forecast is for.
3. Get pre-approved now, buy when you find the right house. I’ve had clients tell me they’re waiting for rates to drop. That’s a reasonable instinct but a flawed strategy. The same macro forces that would bring rates down (slower growth, softer inflation) would also bring more buyers back into the market, and inventory would tighten fast. Marin prices do not decline in a falling-rate environment — they accelerate. The time to negotiate is now, not when everyone else is back.
What I Expect Through the Rest of 2026
Base case: rates stay in the 6.875%–7.25% range through November. If the Fed hikes again in November, we could briefly touch 7.5%. If inflation data surprises to the downside and the Fed signals a pause, we pull back to the mid-6s. That’s a wide range, and anyone who tells you they know exactly which way it goes is selling something.
What I know with certainty: the 2021 sub-3% era is not coming back in the foreseeable future. Buyers who are waiting for 5% on a 30-year fixed as a baseline expectation are going to be waiting a very long time. The market that exists today — 7% rates, 24% more inventory, negotiating room — is actually more rational and more functional than the frenzy of 2021. It just feels uncomfortable because everyone’s reference point is wrong.
The Bottom Line
The Fed hiked. Rates are at 7%. Marin inventory is the best it’s been in two years. These things are all true simultaneously, and they actually add up to a reasonable market for buyers who are financially prepared and working with a lender who knows this terrain.
If you’re a buyer sitting on the sidelines right now, I’d genuinely encourage you to get a strategy call on the calendar before rates move again. We can model the buydown scenario, look at ARM products, and stress-test your payment at multiple rate scenarios so you walk into any negotiation knowing your numbers cold.
I’m Michael DiVita — DRE #01372066, NMLS #241655. DiVita Home Finance has been serving Marin County and the Bay Area for over 20 years. Call or text me directly: (800) 239-1103.
