The Fed Decides at 1:00 Central Today. A Builder's One-Point Buydown Is Worth $28,000 of Loan to Your Exit Buyer.

By Steve Waller · October 28, 2026

Monday's question, answered

Monday's brief asked whether oil or the tech-stock selloff would win the 10-year, and set 5.10% by Wednesday morning as the line that would put last week's rate decline at risk. Neither side won. The Federal Reserve's H.15 release closed last week with the 10-year at 5.00% on Friday; market quotes had it near 5.00% Monday and about 5.03% after Tuesday, well short of 5.10%. Brent crude eased to about $115 on Monday, down roughly 1.4% from Friday's six-month high, on hopes of a de-escalation with Iran.

Mortgage rates simply waited. Mortgage News Daily's 30-year index read 7.33% on Friday, Monday and Tuesday, three sessions without a move, with the 15-year at 7.01%. That leaves Thursday's Freddie Mac survey likely to land near last week's 7.32% rather than give the decline back, unless the Fed changes the picture this afternoon.

The Fed today: how to read it

The decision comes at 1:00 p.m. Central, with the target range at 3.75 to 4.00 percent. CME futures on Monday priced about a 91% chance of a hold, and about a 73% chance of a hike by December, up from 42% a month earlier. There is no new dot plot until December, so the statement, the vote and Chair Warsh's press conference carry everything. Three outcomes, and what each means for a loan:

• A hold with one dissent or none. The market reads it as a committee in no hurry. December hike odds would likely ease, and the 10-year has room to drift back toward last Thursday's 4.96%.
• A hold with two or three dissents for a hike. Three members voted for a hike in July. If they dissent again, December is close to decided, and short-term rates firm. The 10-year may move less than you expect, as it did in September.
• A hike. About a one-in-ten chance on Monday's pricing. Bridge and construction lines priced off short-term rates would move a quarter point. The 10-year fell the day the Fed hiked in September, so do not assume a 30-year takeout follows.

Whatever the outcome, Thursday's PCE inflation and GDP numbers are just as likely to move the 10-year as today's statement is.

What came out Tuesday: builders are still pushing

The Census Bureau's September new-home report showed sales at a 676,000 annual rate, down 0.6% from a revised 680,000 in August and down 5.3% from a year ago. The median price was $400,400, down 3.9% from a year earlier. Builders had 476,000 homes for sale, 8.4 months of supply against 8.5 in August. In the South, which includes Houston, sales fell 6.6% to a 413,000 rate, still about 61% of the national total.

Supply above eight months with prices down from last year means builders are still paying to move houses, and the cheapest way for them to do it is a mortgage rate buydown rather than a price cut.

What this does to a deal you are underwriting now

Take a $260,000 loan, Houston's median with 20% down. At today's 7.33% the payment is $1,788 a month. If a builder buys the rate down one full point to 6.33%, the payment is $1,614, $173 a month less. A half-point buydown to 6.83% brings it to $1,700.

Run it the other way. Hold the payment at $1,788 and the buyer can carry about $287,900 of loan at the one-point buydown rate, roughly $28,000 more than your resale buyer at market rates. At a half point it is about $273,400, about $13,400 more. That is the gap a finished flip near new construction has to close, either in price, in seller-paid concessions, or in a better house.

• Fix and flip. If your exit sits within reach of a new subdivision, underwrite a seller concession of at least two points of the sale price, and confirm the deal still clears ARV times 70 to 75%, less repairs and closing costs, after it.
• Long-term rentals. On a $250,000 takeout at the illustrative 7.33%, principal and interest is about $1,719 a month. Today's decision is unlikely to move that much; Thursday's PCE could. Use the rate on your own term sheet.
• Ground-up construction. You are the builder in this picture. Budget for a buydown or a concession at sale, and make sure the completed-value test still works with it.
• Single-family resale. Resale sellers cannot match a buydown dollar for dollar, so expect more price reductions and longer days on market where new homes compete. That is where an offer built from the formula gets heard.
• Multifamily. Builder inventory is single-family, but every renter who buys a new home with a subsidized rate is one less lease renewal. Underwrite renewals conservatively in submarkets with heavy new construction.

The week ahead

• Wednesday, October 28. FOMC decision at 1:00 p.m. Central and Chair Warsh's press conference. Count the dissents.
• Thursday, October 29. The first estimate of third-quarter GDP, expected near 3%, September PCE inflation with core expected near 3.1%, weekly jobless claims, and Freddie Mac's first survey after the Fed.
• Friday, October 30. Markets digest the week. Friday's brief covers the Fed's message and whether the 30-year survey held near 7.32%.

The question for Friday is whether the Fed's tone or Thursday's inflation number sets the 10-year. If core PCE prints above 3.1% and the 10-year closes back above 5.10%, last week's rate relief is gone. If it holds near 5.00%, rates stay where they have been all week, and builders keep doing the discounting.

The full report, and every earlier one, is available on ACP's website at acp-lending.com. Investors can sign up at acp-lending.com/investor-brief to receive new reports by email.

Sources

• Federal Reserve, H.15 Selected Interest Rates, October 26, 2026
• Mortgage News Daily, MND's Daily Mortgage Rate Index
• U.S. Census Bureau, New Residential Sales, September 2026
• Kiplinger, October Fed Meeting: Live Updates and Commentary
• Reuters via Yahoo Finance, Oil settles lower on peace hopes, October 26, 2026
• Trading Economics, US 10-Year Treasury Note Yield
• Freddie Mac, Primary Mortgage Market Survey

Market data is from public sources and is provided for information only. Nothing here is an offer of credit, a rate quote, or investment advice. Financing is subject to underwriting, lender approval, appraisal or valuation, title, insurance, property eligibility and program availability.

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