The Federal Reserve raised its benchmark interest-rate target by 0.25 percentage point on September 16, 2026, but that does not mean mortgage rates automatically increased by the same amount. For Northern Illinois and Southern Wisconsin buyers, the numbers that matter most are the mortgage rate they can actually obtain, their complete monthly housing payment and what homes fit their budget.
The Fed Raised Rates Today. What Happened?
Interest rates are back in the headlines following the Federal Reserve's September meeting.
On September 16, 2026, the Federal Open Market Committee voted unanimously to raise its target range for the federal funds rate by one-quarter of a percentage point, bringing the range to 3.75% to 4.00%.
The Federal Reserve said inflation remains elevated and that today's action is intended to support a return toward its 2% inflation goal.
For home buyers, however, there is an important distinction:
The federal funds rate is not a mortgage rate.
The Federal Reserve does not directly set the interest rate on a 30-year mortgage. Its decisions influence financial markets and borrowing conditions throughout the economy, but mortgage rates are determined separately.
That means today's quarter-point Fed increase should not be interpreted as an automatic quarter-point increase in mortgage rates.
What Are Mortgage Rates Right Now?
As of September 16, 2026, the most recent Freddie Mac Primary Mortgage Market Survey is from September 10.
Freddie Mac reported:
30-year fixed-rate mortgage: 6.76%
15-year fixed-rate mortgage: 6.09%
The previous week's averages were 6.71% for a 30-year mortgage and 6.04% for a 15-year mortgage.
There is one particularly important point for buyers reading today's headlines:
The September 10 Freddie Mac mortgage-rate numbers were measured before the Federal Reserve's September 16 announcement.
Therefore, 6.76% should not be described as the mortgage rate resulting from today's Fed decision.
Freddie Mac publishes its Primary Mortgage Market Survey weekly. Its figures are national averages based on mortgage applications submitted through Freddie Mac's Loan Product Advisor by lenders across the country.
They are useful benchmarks, but they are not a rate quote for an individual buyer.
The rate offered to a particular borrower can depend on the lender, loan type, credit profile, down payment, loan characteristics, points and current market conditions.
Does a Fed Rate Increase Mean Mortgage Rates Will Go Up?
Not necessarily, and certainly not on a one-for-one basis.
Mortgage rates are influenced by broader financial markets, including Treasury yields, inflation expectations, economic conditions and expectations about future Federal Reserve policy.
Financial markets also often begin adjusting to expected Federal Reserve actions before an FOMC meeting takes place.
As a result, some of the market reaction to a widely anticipated Fed decision may occur before the announcement itself. Mortgage rates can move before a Fed meeting, after it, or sometimes in a different direction than consumers might expect from the headline.
That is why a 0.25 percentage-point increase in the federal funds target range does not automatically produce a 0.25 percentage-point increase in a 30-year mortgage rate.
For someone buying a home, the practical approach is to request an actual current mortgage quote from a qualified lender rather than trying to calculate a mortgage rate directly from the Fed's decision.
Why Do Mortgage Rates Matter So Much to Home Buyers?
Mortgage rates directly affect the principal-and-interest portion of a buyer's monthly payment.
Even relatively small changes can affect purchasing power, particularly when financing hundreds of thousands of dollars over a 30-year loan term.
But the interest rate is only one part of determining whether a home is affordable.
Buyers should also consider:
Property taxes
Homeowners insurance
Mortgage insurance, when applicable
HOA or condominium fees
Utilities
Maintenance and repairs
Existing debts
Emergency savings
Closing costs and other upfront expenses
Our guide to how much house you can comfortably afford explains why the largest mortgage a buyer qualifies for and the amount a household is comfortable spending are not necessarily the same.
What Does This Mean for Northern Illinois and Southern Wisconsin Buyers?
Mortgage-rate news is national, but real estate is local.
A buyer looking in Grayslake, Gurnee, Lake Villa, Antioch, Fox Lake, Round Lake or McHenry may encounter different prices, property taxes, inventory and housing types from a buyer looking in Kenosha, Pleasant Prairie, Bristol, Salem Lakes or another Southern Wisconsin community.
Even two homes with the same purchase price can have different total monthly costs.
Property taxes can differ significantly from one property to another. Homeowners insurance, association fees and other expenses can also change the calculation.
That is especially important for buyers comparing homes on both sides of the Illinois-Wisconsin state line.
Instead of comparing homes solely by purchase price, compare the estimated complete monthly housing cost of the individual properties you are considering.
We recently looked at why national housing headlines do not tell the entire local story. Mortgage rates are another example of why national information should be combined with local market conditions.
Should You Wait for Mortgage Rates to Fall Before Buying?
This may be the biggest question today's Fed announcement raises for prospective buyers.
Unfortunately, no one can know with certainty where mortgage rates will be several months from now.
Rather than basing a home purchase entirely on an interest-rate forecast, buyers can ask more practical questions:
Can we comfortably afford the complete monthly payment today?
Do we have sufficient money for the down payment and other purchase expenses?
Will we have appropriate savings remaining after closing?
Are homes that meet our needs available in our price range?
How long do we expect to own the property?
Is there a personal reason we need or want to move now?
What would need to change financially for waiting to make more sense?
The answer will not be the same for every household.
Someone relocating for a job may have a different timeline from a renter who is comfortable remaining in their current home. A first-time buyer may face different considerations from a homeowner who needs to coordinate a sale and purchase.
Homeowners considering their next move can also read our guide to buying before selling your current home.
Do Not Forget About the Costs Beyond Your Mortgage
A changing mortgage rate can understandably get a buyer's attention, but it should not distract from the rest of the home-buying budget.
Depending on the transaction, buyers may need money for:
Earnest money
Home inspections
Appraisal expenses
Closing costs
Prepaid taxes and insurance
Moving expenses
Immediate repairs or improvements
Emergency reserves after closing
Our recent guide to cash you may need beyond the down payment takes a more detailed look at these expenses.
A lender's Loan Estimate can provide transaction-specific information about the proposed loan, estimated monthly payment, closing costs and estimated cash needed to close.
What Should Buyers Do After Today's Fed Announcement?
For someone considering a home purchase in Northern Illinois or Southern Wisconsin, today's Fed announcement does not require a dramatic change in strategy.
It is a good reason to make sure your financial information is current.
Consider these practical steps:
Talk with a qualified mortgage lender.
Request a current rate and payment estimate based on your situation.
Ask how different interest rates could change your estimated payment.
Determine a comfortable monthly housing budget.
Include property taxes and homeowners insurance when comparing properties.
Consider HOA or condominium fees when applicable.
Review how much cash you expect to need for closing.
Keep appropriate reserves available after the purchase.
Avoid assuming that today's national mortgage-rate average is the exact rate you will receive.
Search for homes using realistic current numbers rather than depending on a particular future mortgage rate.
First-time buyers may also want to review our guide to common first-time home buyer mistakes.
What If Mortgage Rates Fall After You Buy?
This question often comes up when buyers are considering purchasing in an elevated-rate environment.
Some homeowners refinance when mortgage rates later fall enough to make refinancing worthwhile.
However, buyers should not purchase a home based on the assumption that they will definitely be able to refinance later.
Future rates are uncertain. Refinancing also involves qualification requirements and can involve closing costs and other expenses.
A safer approach is to make sure the mortgage and total housing payment you accept today work for your current financial situation. If a beneficial refinancing opportunity becomes available in the future, it can be evaluated at that time with a qualified lender.
The Star Home Team's Perspective
Mortgage rates matter. They can affect purchasing power, monthly payments and the price range a buyer is comfortable considering.
But mortgage rates are still only one part of a home-buying decision.
When we work with buyers throughout Lake County, McHenry County, Kenosha County and surrounding Northern Illinois and Southern Wisconsin communities, our role is not to predict where interest rates are heading.
Our role is to help buyers understand the local real estate side of their decision.
What homes are available within your budget?
What are comparable properties selling for?
What is happening with inventory in the particular community and price range you are considering?
How do individual properties compare?
What should you consider when preparing an offer?
A qualified mortgage professional can help you evaluate financing, mortgage programs and current rates. We can help you evaluate homes, communities, local market conditions and the real estate transaction.
Together, that information can help you make your own informed decision.
Frequently Asked Questions About Mortgage Rates and Today's Fed Decision
What are mortgage rates as of September 16, 2026?
Freddie Mac's most recent weekly survey, released September 10, reported an average 30-year fixed mortgage rate of 6.76% and an average 15-year fixed rate of 6.09%. These are national averages and predate the Federal Reserve's September 16 rate decision. Individual borrowers may receive different rates.
Did the Federal Reserve raise interest rates on September 16, 2026?
Yes. On September 16, the Federal Open Market Committee voted 12-0 to raise the target range for the federal funds rate by 0.25 percentage point to 3.75% to 4.00%. The Federal Reserve said inflation remains elevated and that the action supports a return toward its 2% inflation goal.
Did mortgage rates increase 0.25% because the Fed raised rates 0.25%?
No automatic 0.25% increase occurs. The federal funds rate and mortgage rates are different interest rates. Mortgage rates respond to broader financial-market conditions, including expectations about inflation, the economy and future monetary policy. Markets can also react to an expected Fed decision before the announcement occurs.
Should I wait for mortgage rates to fall before buying a house?
There is no answer that applies to every buyer because future mortgage rates are uncertain. Consider your current budget, total estimated housing payment, savings, moving timeline and available homes. Buyers should make sure a purchase works under today's circumstances rather than relying on a particular future mortgage rate.
Are mortgage rates the same for everyone?
No. Freddie Mac publishes national averages, but individual mortgage offers vary. Factors can include the lender, loan program, borrower qualifications, credit profile, down payment, loan characteristics, points and current market conditions. Buyers should obtain quotes based on their own circumstances.
Are mortgage rates the same in Illinois and Wisconsin?
There is not one universal mortgage rate for all Illinois or Wisconsin buyers. Loan pricing depends on the borrower, lender, loan and property. The total cost of owning a home can also differ because property taxes, homeowners insurance, association fees and other property-specific expenses vary.
Should I get pre-approved even if I am waiting to see what happens with rates?
Speaking with a lender can help you understand your current purchasing power and how different mortgage-rate scenarios might affect your payment. It can provide useful information even if you ultimately decide to wait before purchasing.
Can I refinance later if mortgage rates go down?
Possibly. Homeowners sometimes refinance when future rates and their circumstances make doing so beneficial. Refinancing is not guaranteed, however, and generally requires qualification and involves costs. A buyer should therefore be comfortable with today's mortgage and payment without depending on a future refinance.
The Bottom Line for Northern Illinois and Southern Wisconsin Buyers
Today's Federal Reserve announcement will generate plenty of interest-rate headlines.
The most important thing for home buyers is understanding what those headlines actually mean.
The Fed raised its federal funds target range by a quarter percentage point on September 16, 2026. It did not directly raise 30-year mortgage rates by a quarter point.
And as of today, Freddie Mac's latest published national mortgage-rate average is still the September 10 reading of 6.76% for a 30-year fixed mortgage. That measurement predates today's Fed announcement.
For buyers in Northern Illinois and Southern Wisconsin, your actual mortgage quote, complete monthly housing costs, available properties, budget and personal timeline provide more useful information than trying to predict exactly where rates will go next.
If you are considering buying in Lake County, McHenry County, Kenosha County or surrounding communities, The Star Home Team can help you understand what is happening in the local housing market and explore homes that fit your goals.
Sources
Federal Reserve Board
"Federal Reserve issues FOMC statement"
September 16, 2026
https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm
Freddie Mac
"Primary Mortgage Market Survey"
Rates as of September 10, 2026
https://www.freddiemac.com/pmms
Freddie Mac
"Mortgage rates and affordability"
Accessed September 16, 2026
https://myhome.freddiemac.com/buying/mortgage-rates
About the Author
Susan Starwalt is the Broker Owner of Better Homes and Gardens Real Estate Star Homes and The Star Home Team, serving Northern Illinois and Southern Wisconsin. Licensed since 1998, Susan works alongside Jim Starwalt and the company's management team to support one of the region's top-producing real estate organizations.
The Star Home Team has helped more than 4,000 families buy and sell homes and is recognized as one of Illinois' leading real estate teams. The team serves buyers and sellers throughout Lake County, McHenry County, Kenosha County, and surrounding communities, providing expert guidance, local market knowledge, innovative marketing, and personalized service.
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