Mortgage Rates Today, September 28, 2026: Let's Hope This Week Is Kinder to Rates than Last Week Was

The bigger picture

This is a potentially big week for mortgage rates, with two of the three most important monthly economic reports scheduled for Wednesday and Friday. Those are the Federal Reserve's favorite gauge of inflation and the official jobs report, respectively.

They could send mortgage rates higher or lower, depending on what they say. But other powerful forces were acting on those rates last week and might again this.

Those included hopes and fears for the Iran war, oil prices, and a "disastrous" Treasury auction that contributed to yields on 10-year Treasury notes, which mortgage rates often shadow, "on pace for its highest settlement since June 14, 2007," according to MarketWatch. Those rates for 30-year fixed-rate mortgages ended last week (at 7.361%) significantly higher than they started it (at 7.090%).

Scroll on down for much more on the forces affecting mortgage rates today, including two economic reports that are on this morning's calendar.

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What's coming up?

Normally, economic reports are the main drivers of changes to mortgage rates. But these are not normal times.

And, until recently, only blockbuster reports, mostly concerning employment and inflation, have had an appreciable impact over much of this year. More important have been the general mood in markets and economically consequential news. News items concerning the war, employment, inflation, tariffs, and deficit funding are especially influential at the moment.

The Fed

On Sep. 16, the Federal Reserve's rate-setting body (the Federal Open Market Committee or FOMC) hiked general interest rates for the first time in three years.

That vote was unanimous. But official Fed documents revealed that FOMC members are deeply divided over what comes next.

"Sixteen of 19 officials expect another increase at either their October or December meeting," reported MarketWatch soon after the meeting. "For next year, 10 officials signaled they see no more moves, but eight officials are penciling in another quarter-point increase."

Such small majorities within the FOMC suggest the number and timing of future rate hikes will likely be driven by key data: inflation and employment reports in the coming months. The Fed's twin mandates are to keep the inflation rate down at around 2% (something it's failed to achieve over the last five years) and to maintain healthy employment levels.

Unfortunately, we think it is likely that inflation will remain elevated well into 2027, even if the Iran war ends soon. We suspect that the global oil market is in such bad shape that it will take a long time for gas and diesel prices to fall back to anything close to pre-war levels. More on that below.

And recent stronger-than-expected economic data mean we might not see rising unemployment, leaving the Fed free to focus on inflation.

The FOMC doesn't directly set new fixed-rate mortgage rates. But the factors that influence its decisions (and to a lesser extent the decisions themselves) certainly do move those rates, usually ahead of Fed rate-change announcements.

The war and mortgage rates

Following a pause in fighting, since Aug. 31 there has been intermittent military action involving the U.S. and Iran, mostly earlier in September.

Oil prices have moved higher on most days since. Last night, they remained over $100 per barrel.

Over the week ending Sep. 19, Houthis escalated their attacks, striking at Saudi cities, including the capital Riyadh, along with oil facilities. "Saudi Arabia on Saturday confirmed that Yemen's Houthi rebels tried to attack its capital with a ballistic missile, the first targeting of Riyadh since the escalation in fighting with the Tehran-backed rebels that has opened a new front in the Iran war," reported NPR.

Fighting appears to have continued since then, but has received little media coverage. There are recent reports that the Saudi east-west pipeline, which was closed following Houthi airstrikes, has reopened.

On Sep. 25, the Iranian government offered a seven-day ceasefire, during which it said it would open the Strait of Hormuz and begin talks on nuclear weaponry. But the U.S. rejected the offer.

Peace talks with Iran and mediators had already stalled before recent escalations, and President Donald Trump adopted a new strategy of economic warfare on Tehran. "Treasury Secretary Scott Bessent said the U.S. is launching a new campaign to isolate the Iranian regime, warning that countries and companies that do business with Tehran will face the wrath of the Trump administration," The Wall Street Journal reported on Aug. 24. Some think that initiative has turned out to be a damp squib, but it's still early days.

Iran is certainly in a weak position economically, and waiting for it to buckle may be a smart way to resolve the conflict. However, markets remain anxious for a rapid reopening of the Strait of Hormuz.

The war, oil prices, inflation and markets

Mortgage rates respond to war news because a prolonged full or partial closure of the Strait of Hormuz could again choke off 20% of the world's oil supply, putting additional pressure on gas, diesel, fertilizer, and many other prices. It would take years to build the infrastructure necessary to bypass the Strait completely.

On Sep. 14, The Wall Street Journal reported on a gloomy outlook among oil industry leaders when they met in Austin, TX, the previous Friday. "American oil executives warned for months that the prolonged closure of the Strait of Hormuz was bound to cause a fuel crisis. Now, they say it is here.

"Commercial fuel stocks around the world have been depleting for more than six months, and strategic crude reserves can’t be tapped much further," continued The Journal. "Attacks last week shut down a crucial crude pipeline in Saudi Arabia that bypassed the Strait, stranding at least 2.5 million barrels a day from an already tight global oil market, analysts estimate."

"Crude oil flows out of the Strait of Hormuz reached 33.7 ​million barrels so far in the week starting September ‌20, preliminary ship-tracking data from Kpler showed on Friday, putting exports roughly on track with the previous week's levels. The traffic comprised 19 tankers," reported Reuters on Sep. 25. The average during Feb. 1–27, immediately before the war started, was 129 ships daily, according to the UN Trade and Development agency.

Strategic petroleum reserves in the U.S. and elsewhere globally are now at multi-decade lows, meaning there's less room to cushion consumers from rising gas prices. It may not feel like it, but this method of suppressing pump prices has been in place almost since the start of the conflict. And some observers worry that it will grow increasingly difficult to access remaining inventory for technical extraction reasons.

The U.S. Energy Information Administration says strategic petroleum reserve crude inventories fell to 284,552,000 barrels for the week ending Sep. 18, marking the lowest level since 1982. The reserve stood at 415,064,000 barrels before the Iran conflict began.

Rising oil prices tend to drive up mortgage rates because they're inflationary. Those rates are largely determined by a type of bond, the mortgage-backed security. And bond purchasers are wary of buying bonds when inflation is too warm because increasing prices eat into the value of the fixed incomes that bonds deliver.

The Refinery Problem

Meanwhile, many oil refineries in the Middle East and Russia are out of commission due to damage from the separate wars involving Iran and Ukraine. That began by sending oil prices lower on most days — why buy crude oil when you can't refine it? But that trend has moderated more recently.

Regardless, the refinery crisis has so far translated into gas prices that are significantly higher than a month ago and dramatically higher than a year ago, alongside diesel prices that are frequently setting new all-time highs. That's because a lack of refining capacity exacerbates rather than moderates supply issues for consumers and businesses, while demand remains fairly steady.

In his Substack post on Aug. 13, Nobel Prize-winning economist Paul Krugman backed up what we've been saying for some months. He referred to the "crack spread," which is the difference between the price of a barrel of crude oil and that for a barrel of "cracked" (aka refined) oil products, which he said had exploded by about $35 since the start of the Iran conflict.

"So while the price of a barrel of crude is up around $25, the price of the products refined from that barrel is up about 25+35=60 dollars per barrel," wrote Krugman.

Why? "The shortage of refining capacity has, in turn, held crude prices down: Buyers aren’t willing to pay extremely high prices for crude oil they can’t refine," continued Krugman. "Or to put it a different but equivalent way, the cutoff of oil shipments through the Strait of Hormuz in effect required a large rise in global oil prices to ration demand, but much of that rationing has taken place through a rise in the crack spread rather than a rise in crude oil prices."

On Sept. 23, Torsten Slok, Apollo's chief economist, explained in an e-newsletter why diesel is such an issue: "The US Gulf Coast diesel crack spread cleared $100/bbl for the first time on record in August against a normal range of $15 to $30," he wrote. "Unlike a gasoline spike, which lands on consumers as a one-time tax on discretionary spending, diesel is an intermediate input embedded in the delivered cost of nearly every physical good, from freight and rail to agriculture and construction.

"That means the rise in diesel prices does not stay in the energy line of the CPI [consumer price index] but migrates with a lag into core goods and services, which is exactly the kind of pass-through the Fed cannot dismiss as transitory," Slok continued. In other words, it creates sticky inflation that's hard to clean up.

Of course, any sudden good news from the Middle East could still send mortgage rates tumbling, regardless of that day's economic reports. Unfortunately, sudden bad news could — as we've seen all too often — send them higher.

Why bond markets act differently from stock markets

Mortgage rates are largely dictated by the yields on a type of bond, the mortgage-backed security (MBS). So, we focus on bond markets.

On May 7, The New York Times explored why stock markets and bond markets have been behaving so differently from each other since the start of the conflict in the Middle East.

Investors in stocks have been wagering that U.S. companies will continue to generate large profits during the conflict. And the stock market typically cares only about whether dividends and company values will continue to rise.

"But the bond market is another matter," said The Times. "Bond traders have maintained a much sharper focus on risk. Yields remain correlated with shifts in the price of oil. As oil prices have spiked and inflation has risen, yields have risen and bond prices, which move in the opposite direction, have fallen."

More recently, bond yields (and mortgage rates) have risen on concerns about the level of government debt, too.

Mortgage rates today

There are no economic reports on today's MarketWatch economic calendar. Typically, when reports are published, mortgage rates move higher on better-than-expected economic data and lower on worse-than-expected numbers.

What's next?

Wednesday should see the publication of the August personal consumption expenditures (PCE) price index, which is especially important now. It's the Fed's favorite gauge of inflation because it's the most accurate.

Friday, Oct. 2 brings the September jobs report, and that's probably going to prove one of the three most consequential reports for mortgage rates that we'll see in October. The others are the consumer price index and the PCE price index.

The end of each month often sees investors tidying their portfolios, ready to start afresh on the first. That can lead to otherwise incomprehensible trading if one doesn't know what's happening. So, there's a second reason to watch out for Wednesday.