The Fed meets Tuesday and my exit buyer just lost $12,000 of budget in eight days

Rates moved hard last week and I think a lot of us are still underwriting against the old number.

The weekly survey says 6.76%, up from 6.71%. That understates it. The daily average ran 6.89 to 6.97 to 7.07 across three sessions, the highest since May 2025. The ten-year went from 4.78% on the 4th to 4.95% on the 10th before easing back Friday.

Two prints did it. Producer prices Thursday, +0.4% in the month and +5.4% on the year. CPI Friday, +0.4% and +3.4%, core +0.3%. Gasoline is up 27.4% over twelve months and accounted for more than a third of the monthly all-items increase. That is a supply shock, not a wage story, which is the kind a central bank has a harder time looking through.

The FOMC meets Tuesday and Wednesday with a dot plot attached. The range has been 3.50-3.75% since the hold in July, which went 9-3 with three members already wanting a quarter point more. Futures went from 44% odds of a September hike in early August to roughly 80% after Friday.

Here is why I care, and I suspect why you should.

My exit buyer is financed. Houston median is $330,000. Twenty percent down is a $264,000 loan. At 6.71% that is $1,705 a month. At 7.07% it is $1,769.

Sixty-four dollars does not sound like much until you invert it. Hold the payment at $1,705 and that buyer now qualifies for about $254,500, which is roughly $318,000 of house. His budget fell $12,000 in eight days, and nothing about the house changed.

So the assumption I keep finding in files, my own included, is a spring exit priced off a rate that is supposed to be lower by then. That is not a forecast anymore, it is an unpriced risk. And the rental exit tightens before the flip does, because coverage gets decided in the last sixty dollars of payment.

What I am changing: rerunning the purchase test at today's exit rate instead of the one in the file, and treating rehab schedule slip as a pricing risk rather than just a carry cost.

What I am not sure about is the dot plot. A quarter point is already in the ten-year. The 2027 path is not. For those of you who hold rather than flip, do you actually adjust your buy box off the projections, or do you ignore them and wait for realized rates? I have never found a good answer to that one.