Two things happened last week that most people read separately. Put together, they make a pretty clear case against waiting for the market to get cheaper.

The Hike Might Not Be a One and Done

The Fed raised 25 basis points on September 16. What changed last week is that officials started telling us what comes next. Governor Barr said further increases may be needed to bring inflation back to 2% "in a timely fashion," and that inflation risks have increased while labor market risks have eased. Williams at the New York Fed and Paulson at the Philadelphia Fed both signaled on Thursday that another hike may be appropriate. Markets responded by raising the odds of a hike at the October 27-28 meeting.

I want to flag this because it still cuts against how a lot of people are underwriting. Much of 2026 was modeled around cuts. We now have a hike on the books and three officials publicly leaning toward another one, with two meetings left this year. If your deal only works with a refinance at a lower rate in the next year or so, you are betting against what the Fed is saying out loud.

Add in the Iran headlines from the UN General Assembly, where comments from President Trump and President Pezeshkian raised uncertainty around the conflict and negotiations. The thing to watch there is oil. Higher oil is inflation, and inflation is the exact thing keeping the Fed in hiking mode.

The Labor Data Is Softer Than It Looks, but Not Soft Enough

Initial claims edged down to 197,000 and continuing claims sit near 1.72 million. Both look fine on the surface. Underneath, initial claims probably miss people moving into gig and contract work instead of filing, and some of the decline in continuing claims is likely benefits expiring rather than rehiring. So there is some hidden weakness. But the Fed reacts to the data it sees, and what it sees does not force a pause.

Demand Did Not Wait for Better Rates

New home sales rose 6.4% in August to a 684,000 annual pace, the strongest of the year and above expectations. July was revised up 36,000 to 643,000. Year over year, sales were down 2%. Since this report is based on signed contracts, it reflects real buyer commitments made in August with rates already elevated and a hike widely expected.

The Price Headline Is a Mix Story

The median new home price fell 5.8% year over year, and that turned into "home prices are falling" coverage. It is mostly composition. Sales of homes under $500,000 rose notably from a year ago, which drags the median down without saying anything about what a given house is worth. Broader data still shows appreciation nationally.

For investors, the mix shift is actually the more useful signal. Demand is strongest where the payment is most manageable. That is the entry level segment, which is also the exit for a lot of flips and the buyer pool behind a lot of BRRRR refi appraisals.

Investor Takeaway

Do not underwrite to a rate cut, and do not underwrite to a price drop. The Fed is openly talking about going higher, and the one data point people are using to argue prices are softening is a mix effect. If anything, strong entry level new home demand supports values and exit prices in that range. Take your margin from terms and property selection rather than from a rate forecast, and read Tuesday's Case-Shiller and FHFA numbers along with Wednesday's PCE before you adjust any assumptions heading into October.