Letter From the Broker
Texas Land Market Update — October 2026: What the Fed’s Rate Hike Means for Ranch Buyers and Sellers
By Charles Armstrong, Broker & Founder | October 2026
And just like that, it’s October. Temperatures are starting to drop, the opening of whitetail archery season is this weekend, and with solid reports from the dove fields, I think it’s safe to say fall is upon us. Additionally, as I am writing this, we are receiving much-needed rain throughout the state, with more to come in the following days. Praise God! We will take all we can get!
This month I would like to speak a little on interest rates. For the first time in a few years, the Federal Reserve moved rates up instead of down or sideways — and if you’re thinking about buying or selling Texas land, it’s worth understanding what that does and doesn’t mean for you.
The Short Version
- On September 16, the Fed raised its benchmark rate a quarter point to 3.75%–4.00% — its first increase since 2023 — and signaled one more could come before year-end.
- The Fed doesn’t set the rate on your land loan, but it sets the tone. Mortgage rates are hovering right around 7%.
- Buyers: get your financing lined up early with a lender who knows rural land, and don’t try to time the bottom.
- Sellers: buyers are running payment math, so pricing right — and staying open to creative terms — matters more than it did a year ago.
In This Letter
What the Fed Did
On September 16, the Federal Reserve raised its benchmark interest rate by a quarter of a percentage point, bringing it to a target range of 3.75%–4.00%. The vote was unanimous, and it was the first time the Fed has raised rates since 2023.
The reason is inflation. It’s still running above the Fed’s 2% target, and higher energy prices have been pushing it along lately. The Fed’s own projections also leave the door open for one more increase before the end of the year. Their next meeting is October 27–28, so we’ll know more soon.
What It Means for Borrowing
One thing I want to clear up: the Fed rate is not the rate on your land loan. It’s the rate banks charge each other overnight. But it sets the tone for everything built on top of it.
Mortgage rates had already been climbing before the announcement. The average 30-year fixed was sitting at 6.95% the week of the decision — its highest level since January 2025 — and it has hovered right around 7% since. Land loans typically run a bit higher than a standard home mortgage and often require more money down, so when rates move, ranch buyers feel it. If you want a deeper look at how ranch financing works, our farm and ranch financing guide is a good place to start.
“The Fed doesn’t set the rate on your land loan — but it sets the tone for it.”
What It Means for Ranch Buyers
Higher rates mean a higher monthly payment on the same piece of ground. That’s the plain truth. But it doesn’t mean now is a bad time to buy. A few things I’d keep in mind:
Line up financing first
Talk to a lender who does rural land — ag lenders and Farm Credit associations know how to value acreage in a way a typical home lender may not. Knowing your number before you fall in love with a property saves a lot of heartache.
Don’t try to time the bottom
With the Fed signaling it may not be done, waiting on rates to come down could be a long wait. You can refinance a rate later. You can’t go back and buy the right ranch once someone else has.
Use the moment to negotiate
When borrowing gets more expensive, some buyers step back. Less competition can mean more room to negotiate on price and terms.
What It Means for Ranch Sellers
If you’re selling, know that most of your buyers are running payment math right now. That makes pricing your ranch right from day one more important than it was a year ago. An overpriced listing in a higher-rate market tends to sit.
It’s also a good time to be open to creative terms. Owner financing has long been part of how Texas land changes hands, and in a higher-rate environment it can widen your pool of buyers. It isn’t right for everyone, so visit with your attorney and CPA before offering it.
The good news, as we talked about last month, is that the Texas economy underneath this market is still doing its job. Rates change the math, but they don’t change the fact that people want to own Texas land.
We’ll keep an eye on the October meeting and report back. In the meantime, here’s hoping the rain keeps coming. See ya next month!
Thinking about your next move on Texas land?
Whether you’re ready to buy the right ranch or bring a well-priced property to market, our team knows this country and these buyers.
Frequently Asked Questions
What did the Federal Reserve do in September 2026?
On September 16, 2026, the Federal Reserve raised its benchmark interest rate by a quarter point to a target range of 3.75%–4.00%. It was a unanimous vote and the Fed’s first rate increase since 2023, driven by inflation that remains above its 2% target.
Does the Fed rate hike raise the rate on my land loan?
Not directly. The Fed rate is what banks charge each other overnight, not the rate on a land loan or mortgage. But it sets the tone for borrowing costs overall, and mortgage rates have hovered around 7% since the decision. Land loans typically run a bit higher than home mortgages.
Is now a bad time to buy a Texas ranch?
Not necessarily. Higher rates mean a higher payment, but they can also mean less competition and more room to negotiate. Line up financing early with a lender who knows rural land, and remember you can refinance a rate later but can’t go back and buy the right ranch once it’s gone.
How should ranch sellers respond to higher interest rates?
Price the property right from day one, since buyers are running payment math. Sellers can also consider creative terms like owner financing to widen the buyer pool, after visiting with their attorney and CPA.
Related Reading
- Letter From the Broker — September 2026
- Understanding Farm and Ranch Financing
- How to Price a Texas Ranch to Sell
- Texas Dove & Teal Season 2026: Field Report + Key Dates
- What Is a Texas Ranchette?
Sources
- Board of Governors of the Federal Reserve System — Press Releases (FOMC statement, September 16, 2026)
- Freddie Mac — Primary Mortgage Market Survey (30-year fixed average)
Charles ArmstrongLand. Legacy. Lifestyle.
