--- title: "Fed raises rates to 3.75%-4%: what the first hike since 2023 means for landlords" description: "The Fed raised rates a quarter point to 3.75%-4%, and 16 of 18 officials project a higher rate by year-end. Floating-rate debt feels it first; refinancing and values follow a 10-year Treasury that crossed 5% this week. What to do with loans, renewals and budgets this week." date: 2026-09-17 updated: 2026-09-17 author: "Proppely Research Desk" kind: NEWS_BRIEF tags: ["mortgage-rates", "economy", "multifamily", "rent-growth", "construction"] reading_minutes: 5 word_count: 1042 canonical: "https://www.proppely.com/insights/fed-rate-hike-september-2026-what-landlords-should-do" html: "https://www.proppely.com/insights/fed-rate-hike-september-2026-what-landlords-should-do" feed: "https://proppely.com/insights/feed.xml" license: "Free to read and cite with a link to the canonical URL." sources: - title: "Federal Reserve issues FOMC statement" url: "https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm" publisher: "Board of Governors of the Federal Reserve System" published: "2026-09-15" - title: "September 16, 2026: FOMC Projections materials, accessible version" url: "https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm" publisher: "Board of Governors of the Federal Reserve System" published: "2026-09-15" - title: "Transcript of Chairman Warsh's Press Conference Opening Statement (preliminary)" url: "https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20260916.pdf" publisher: "Board of Governors of the Federal Reserve System" published: "2026-09-15" - title: "Meeting calendars, statements, and minutes" url: "https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm" publisher: "Board of Governors of the Federal Reserve System" - title: "Multifamily experts react to Fed's first rate hike in 3 years" url: "https://www.multifamilydive.com/news/federal-reserve-interest-rates-inflation/830600/" publisher: "Multifamily Dive" published: "2026-09-15" - title: "As Fed Hikes Rates for First Time Since 2023, Commercial Real Estate Comes to Terms" url: "https://commercialobserver.com/2026/09/fed-interest-rate-hike-kevin-warsh/" publisher: "Commercial Observer" published: "2026-09-15" - title: "Mortgage rates rise to 7.28% as Fed rate hike looms" url: "https://www.housingwire.com/articles/mortgage-rates-fed-hike/" publisher: "HousingWire" published: "2026-09-14" - title: "The Fed rate-hike cycle has started. What's next?" url: "https://www.housingwire.com/articles/the-fed-rate-hike-cycle-has-started-whats-next/" publisher: "HousingWire" published: "2026-09-15" - title: "Fed raises rates but construction has a bigger problem" url: "https://www.constructiondive.com/news/fed-raises-rates-construction-inflation-september-2026/830559/" publisher: "Construction Dive" published: "2026-09-15" - title: "Annual Rent Growth Strengthens as Apartment Market Recovery Continues" url: "https://www.realpage.com/analytics/august-2026-us-data-update/" publisher: "RealPage" published: "2026-09-02" --- # Fed raises rates to 3.75%-4%: what the first hike since 2023 means for landlords > The Fed raised rates a quarter point to 3.75%-4%, and 16 of 18 officials project a higher rate by year-end. Floating-rate debt feels it first; refinancing and values follow a 10-year Treasury that crossed 5% this week. What to do with loans, renewals and budgets this week. ## Key takeaways - The Fed raised its target range a quarter point to 3.75%-4% on a 12-0 vote, its first increase since July 2023. - In the dot plot, 16 of 18 officials put the year-end rate above today's level, implying one or two more quarter-point hikes in 2026. - Floating-rate and bridge debt feel the hike first; refinancing and values track the 10-year Treasury, which crossed 5% this week. - Mortgage rates above 7% likely support resident retention, but national rents rose only 0.9% in August, so price renewals to submarket comps. - Model floating-rate loans at one and two more hikes, price rate caps early, and build 2027 budgets using the Fed's 3.7% projection for this year's inflation as a reference point (it projects 2.3% for 2027). The Federal Reserve raised its benchmark rate a quarter point on Wednesday, to a [target range of 3.75% to 4% on a 12-0 vote](https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm). It is the Fed's [first increase since July 2023](https://commercialobserver.com/2026/09/fed-interest-rate-hike-kevin-warsh/), and officials' own projections point to more: [16 of 18 participants put the year-end rate above today's level](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm). For rental owners the first hit lands on floating-rate debt. The larger effects run through long-term rates, loan sizing, operating costs and how many residents leave to buy. ## What happened The FOMC statement says inflation remains elevated and that the increase will support a [timelier return to the Committee's 2 percent goal](https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm). Chair Kevin Warsh said at his press conference that the committee ["removed a dose of accommodation,"](https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20260916.pdf) and estimated that the 12-month change in total PCE prices [likely was around 3.6% in August, with core PCE running at about 3.2%](https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20260916.pdf). The projections carry more weight than the quarter point. In the dot plot, [12 participants put the year-end federal funds midpoint at 4.125% and four put it at 4.375%](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm), against a 3.875% midpoint for the new 3.75%-4% range. That implies one or two more quarter-point increases this year; [two participants project no further move](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm). The median participant expects the rate to be [4.1% at the end of 2027, up from 3.6% in the June projections](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm), and projects total PCE inflation of [3.7% this year and 2.3% next year](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm). Warsh said he [has not offered a projection of his own](https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20260916.pdf). Two meetings remain in 2026, on [October 27-28 and December 8-9](https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm). Long rates moved before the vote. The [10-year Treasury yield crossed 5% on Monday and on Tuesday hit its highest level since 2007](https://commercialobserver.com/2026/09/fed-interest-rate-hike-kevin-warsh/). HousingWire's Mortgage Rates Center had [30-year conforming loans averaging 7.28% on Tuesday, up 22 basis points in two weeks](https://www.housingwire.com/articles/mortgage-rates-fed-hike/). ## Why it matters for property managers **Floating-rate debt reprices first.** Construction Dive notes that [short-term credit and revolving loans tied to the prime rate will move higher](https://www.constructiondive.com/news/fed-raises-rates-construction-inflation-september-2026/830559/) with the increase, and floating-rate property loans feel the same pull; fixed-rate debt does not change. Each quarter point adds $2,500 a year in interest for every $1 million of unhedged floating balance. Justin Ashcraft of Northern Ridge Capital told Multifamily Dive that ["Bridge debt is going to feel a real squeeze,"](https://www.multifamilydive.com/news/federal-reserve-interest-rates-inflation/830600/) naming recently finished construction projects and value-add acquisitions. **Refinancing and values follow the 10-year, not the Fed.** Ashcraft said permanent rates were [largely priced in before the decision](https://www.multifamilydive.com/news/federal-reserve-interest-rates-inflation/830600/). Kevin Crook of Investors Management Group told the same outlet that when the 10-year rises, refinancing gets harder as loan proceeds shrink, and Otto Ozen of The Mogharebi Group said that if rates keep moving higher he would expect upward pressure on cap rates and more conservative underwriting. Lenders are also losing patience. NewPoint Real Estate Capital's Ryan Koehler told Commercial Observer ["Lenders are done with kicking the can,"](https://commercialobserver.com/2026/09/fed-interest-rate-hike-kevin-warsh/) describing more loan sales and less willingness to keep extending maturities. **Fewer residents may leave to buy.** HousingWire's Logan Mohtashami wrote that [sales have not grown with mortgage rates above 6.64%](https://www.housingwire.com/articles/the-fed-rate-hike-cycle-has-started-whats-next/), and that purchase application data turned negative year over year once rates stayed above that level. That is a retention tailwind this fall. It is not pricing power: RealPage measured same-store effective asking rents [up 0.9% year over year in August](https://www.realpage.com/analytics/august-2026-us-data-update/), and the South remains the only region with annual rent cuts. **Costs are not cooling.** Nonresidential construction input prices rose [8.9% year over year in August](https://www.constructiondive.com/news/fed-raises-rates-construction-inflation-september-2026/830559/), with several major building materials up by double digits. That is not a residential repair index, but it is a warning for roofs, paving, envelope work and any capital project you plan to bid next year. **New supply keeps shrinking.** ConstructConnect chief economist Michael Guckes told Construction Dive that projects on the edge of their profitability goals may now fall short, and such projects ["will not go to bid."](https://www.constructiondive.com/news/fed-raises-rates-construction-inflation-september-2026/830559/) Completions had already dropped to [about 340,200 units in the year ending in the second quarter, from a peak near 588,000 in late 2024](https://www.realpage.com/analytics/august-2026-us-data-update/). Fewer marginal starts now could mean less lease-up competition once today's pipeline delivers. ## What to do this week This is general information, not financial or legal advice. Loan documents, covenants and notice rules vary; confirm with your lender, advisors and local counsel before acting. 1. **List every floating-rate loan.** Record the spread, reset dates, any rate cap's strike and expiration, and the coverage covenant. Model this week's increase plus one and two more quarter points, the range where [16 of 18 year-end projections fall](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm). 2. **Price rate cap replacements early.** If a loan requires a new cap in the coming year, ask your lender now what terms it will accept and get quotes before the current cap runs out. 3. **Underwrite refinancings at today's long rates.** Size any upcoming refinance or acquisition with the [10-year near or above 5%](https://commercialobserver.com/2026/09/fed-interest-rate-hike-kevin-warsh/), not a forecast, and start maturity conversations with lenders early. 4. **Send renewals with retention in mind.** Mortgage rates near [7.28%](https://www.housingwire.com/articles/mortgage-rates-fed-hike/) may keep some would-be buyers renting, but national rents rose only [0.9%](https://www.realpage.com/analytics/august-2026-us-data-update/). Price to your submarket comps, and offer longer lease terms as a standard renewal option to every resident. Check state and local renewal and rent-increase notice rules. 5. **Rebuild the 2027 budget on current inflation.** Use the Fed's median projection of [3.7% PCE inflation this year](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm), which the same projections see easing to 2.3% in 2027, as a reference point for vendor, payroll and insurance assumptions instead of last year's increases, and rebid service contracts that renew this fall. 6. **Send owners a short note.** Cover the decision, the dot plot and what it means for their specific loans. Leave sell, hold and refinance decisions to the owner and their financial advisors. ## What we're watching - **The October 27-28 meeting.** It is the [next scheduled FOMC meeting](https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm) and the first test of whether the projected additional hike comes quickly. - **The 10-year Treasury.** It drives cap rates and fixed-rate refinancing more than the Fed's target does, and it [crossed 5% this week](https://commercialobserver.com/2026/09/fed-interest-rate-hike-kevin-warsh/). - **Purchase demand.** If [purchase applications stay negative year over year](https://www.housingwire.com/articles/the-fed-rate-hike-cycle-has-started-whats-next/) with rates above 7%, move-outs to buy should stay low into winter. - **Loan sales and lender-controlled deals.** They create acquisition openings and can set lower pricing comps for everyone else. - **Construction starts.** Whether marginal apartment projects stall will shape supply after the current pipeline delivers. ## FAQ **What did the Fed decide at its September 2026 meeting?** The FOMC raised the federal funds target range a quarter point to 3.75%-4% on a 12-0 vote, its first increase since July 2023. In the Fed's September projections, 16 of 18 participants put the year-end rate higher still. **Does the Fed rate hike raise my rental property loan payment?** Floating-rate loans, including many bridge loans, typically reset higher at their next rate reset as short-term rates rise, subject to any interest rate cap; fixed-rate loans do not change. Refinancing costs depend more on the 10-year Treasury yield, which Commercial Observer reported crossed 5% this week. **Should landlords raise rents after the Fed hike?** The hike does not raise what renters can pay. RealPage measured national same-store effective asking rents up just 0.9% year over year in August, so price renewals to submarket comps, while mortgage rates near 7.28% in HousingWire data may keep more would-be buyers renting. **When is the next Fed meeting?** The Federal Reserve's calendar lists the next FOMC meeting for October 27-28, 2026, followed by December 8-9, which comes with updated economic projections. ## Sources 1. [Federal Reserve issues FOMC statement](https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm) — Board of Governors of the Federal Reserve System 2. [September 16, 2026: FOMC Projections materials, accessible version](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260916.htm) — Board of Governors of the Federal Reserve System 3. [Transcript of Chairman Warsh's Press Conference Opening Statement (preliminary)](https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20260916.pdf) — Board of Governors of the Federal Reserve System 4. [Meeting calendars, statements, and minutes](https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm) — Board of Governors of the Federal Reserve System 5. [Multifamily experts react to Fed's first rate hike in 3 years](https://www.multifamilydive.com/news/federal-reserve-interest-rates-inflation/830600/) — Multifamily Dive 6. [As Fed Hikes Rates for First Time Since 2023, Commercial Real Estate Comes to Terms](https://commercialobserver.com/2026/09/fed-interest-rate-hike-kevin-warsh/) — Commercial Observer 7. [Mortgage rates rise to 7.28% as Fed rate hike looms](https://www.housingwire.com/articles/mortgage-rates-fed-hike/) — HousingWire 8. [The Fed rate-hike cycle has started. What's next?](https://www.housingwire.com/articles/the-fed-rate-hike-cycle-has-started-whats-next/) — HousingWire 9. [Fed raises rates but construction has a bigger problem](https://www.constructiondive.com/news/fed-raises-rates-construction-inflation-september-2026/830559/) — Construction Dive 10. [Annual Rent Growth Strengthens as Apartment Market Recovery Continues](https://www.realpage.com/analytics/august-2026-us-data-update/) — RealPage --- Published by the Proppely Research Desk. Canonical: https://www.proppely.com/insights/fed-rate-hike-september-2026-what-landlords-should-do