The Fed's November 2022 decision, as of the week it happened

On November 2, 2022 the Federal Open Market Committee decided to raise the target range for the federal funds rate to 3.75 to 4 percent[1]. That was another 75 basis points. The vote was unanimous among the twelve voting members[1].

Our original Mortgage Watch described the new rate as 4.00 percent. Strictly, the Fed sets a range, and 4 percent was its upper end. The difference matters less than the trend: it was the fourth 75 basis point move in a row, a run that had started in June[5].

The sentence that markets read as a signal

The statement kept the language that ongoing increases in the target range would be appropriate. It also added that, in setting the pace of future increases, the Committee would take into account the cumulative tightening of monetary policy and the lags with which policy affects economic activity and inflation[1].

Traders read that new clause as a hint that smaller hikes were coming. As our original post put it, markets began to celebrate at the release of the policy statement. Stocks rallied and bond yields dropped.

Six increases in eight months, starting from almost zero. Nobody buying a home in Orange County in 2022 had lived through a tightening cycle that fast as an adult homeowner.

Why markets reversed during Powell's press conference

The rally did not survive the press conference. Within a few words, markets reversed, and the reason is in the transcript.

Chair Powell told reporters that the ultimate level of interest rates would be higher than previously expected[2]. Asked about stopping, he said: “It is very premature to be thinking about pausing”[2]. He did confirm that a slower pace was on the way, saying “that time is coming, and it may come as soon as the next meeting or the one after that”[2].

Read together, the message was simple. Smaller steps toward a higher destination. That is what our original post meant when it said the Fed was not nearing the end of its war on inflation and that rates could be lifted higher and stay high longer than markets had estimated.

Housing was named directly

Powell did not leave housing out of it. In his opening remarks he said that activity in the housing sector had weakened significantly, largely reflecting higher mortgage rates[2]. Later, in answer to a question, he said the housing market needed to get back into a balance between supply and demand[2].

Coming from the Chair of the Federal Reserve, that was as close to saying “we know this hurts buyers, and we are going to keep doing it” as you will ever hear.

The labor market

The other half of the story was jobs. Powell described the labor market as one that “remains extremely tight”[2]. Two days later the Bureau of Labor Statistics reported that total nonfarm payroll employment increased by 261,000 in October and that the unemployment rate rose to 3.7 percent[4]. Strong hiring meant the Fed had no reason to back off, which is why our original post called the labor situation seemingly intractable.

Our first version of this update also cited estimates that the Fed could take its rate as high as 5.5 percent. We could not reopen the forecast we were quoting, so we have dropped that attribution. What we can say is where the Fed actually stopped, which is covered in the last section.

Where mortgage rates stood in November 2022

Freddie Mac’s weekly Primary Mortgage Market Survey is the number most lenders and agents quote. Here is how the fall of 2022 looked, week by week[3].

The 30 year average hit 7.08 percent twice that year, on October 27 and again on November 10[3]. The week this post was written sat between those two peaks.

Look at what happened right after. One week after the 7.08 percent reading, the average was 6.61 percent[3]. By the end of December it was 6.42 percent. Anyone who waited for the perfect week to lock was trying to time a number that moved almost half a point in seven days.

I tell buyers the same thing every time rates are this volatile: you do not lock the bottom. You lock a payment you can live with, and you know in advance what would have to happen for a refinance to make sense.

What near 7 percent mortgage rates meant for Orange County buyers

Orange County is a high price market, which means rate changes hit harder here than in most of the country. The same percentage move adds far more dollars to a jumbo sized loan in Corona del Mar than to a modest loan elsewhere.

The table below shows principal and interest only on a 30 year fixed loan, using Freddie Mac’s averages from January 6 and November 3, 2022[3]. Taxes, insurance, HOA dues and Mello-Roos are on top, and jumbo pricing can differ from the survey average, so treat these as illustrations, not quotes.

On an $800,000 loan, the same house cost about $1,800 more per month in November than it would have in January. That is roughly $22,000 a year, before anyone argued about the list price.

How buyers responded

A buyer facing that gap had two real levers. One was the price range: a buyer priced out of the coast could look inland, at Tustin, Fountain Valley or Lake Forest. The other was the structure of the deal, asking a seller for a credit to buy down the rate instead of asking for a lower price.

The credit strategy deserved more attention than it got. A seller credit used for a rate buydown can lower the payment more than the same dollars taken off the price, depending on the loan. Ask your lender to run both on the same net sheet before you write the offer.

• Get a full payment estimate at today’s rate, including property tax and any Mello-Roos.
• Ask the lender to price a temporary and a permanent buydown against a price reduction.
• Decide in advance the rate at which a refinance would pay for itself, given its closing costs.
• Keep reserves after closing; a payment you can make only if nothing goes wrong is too high.
• Check how long the lender’s rate lock lasts and what an extension costs.

Luxury buyers in Newport Coast or Laguna Beach were in a different position. Many of them were paying cash or carrying smaller loans, and for them the higher rates were mostly a reason to negotiate harder on houses that had sat.

So, was November 2022 the time to buy?

My view then, and now, is that the question “is now the time to buy” is less useful than “is this the right house, and can I hold it.” Rates were high and about to go higher. That made a lot of buyers wait, and fewer buyers meant less competition for the ones who stayed in.

If your income was secure and the payment fit at 7 percent for a home you planned to keep at least five to seven years, buying the right one in November 2022 was a reasonable decision. You could refinance later if rates fell. You could not go back and buy the house you passed on.

If either condition failed, waiting was the honest advice. I have told buyers to wait more than once, and I would rather lose a sale than put someone into a payment that keeps them awake.

That caution turned out to matter. As the last section shows, rates did not fall back quickly, and some buyers who counted on a fast refinance waited a long time.

Time to buy real estate in the metaverse?

Our original Mortgage Watch ended with a lighter question. Not that long ago, a piece of property in The Sandbox, one of the largest metaverse platforms, had sold for $4.3 million. The buyer was a virtual real estate developer[7].

Was it time to move from physical real estate to virtual? Billionaire investor Mark Cuban did not think so. In an August 2022 interview he called buying virtual land with real world dollars, in words we will not print in full, the dumbest thing ever[8]. His argument was that any value comes after a community exists around a place, not before, and that buying first on a traditional real estate model gets it backwards[8].

Our view was simpler. Virtual worlds can add more land whenever their owners choose. Physical land in Orange County cannot be expanded. Nobody is making more lots on the bluff in Dana Point or more beach frontage in Seal Beach, and that scarcity is a large part of why property here has held its value over decades.

If you are considering investing in physical real estate, that is a conversation worth having with a lender who can talk about real financing on a real asset.

What has changed since November 2022

Everything in this section was read from the Federal Reserve and Freddie Mac in October 2026.

The Fed did slow down, as Powell had said it might. In December 2022 it raised the range by 50 basis points to 4.25 to 4.50 percent, then by 25 basis points at each of four meetings in 2023, stopping at 5.25 to 5.50 percent in July 2023[5]. So the estimates of a peak near 5.5 percent that we mentioned in 2022 turned out close to the mark.

The range stayed there until September 2024, when the Fed cut by 50 basis points. Further cuts followed in late 2024 and late 2025, bringing the range to 3.50 to 3.75 percent by December 2025[5]. Then in September 2026 the Fed raised it again, by 25 basis points, to 3.75 to 4 percent[5]. That is the same range announced in the week this post was first written.

Mortgage rates were not lower nearly four years later. Freddie Mac’s 30 year fixed average was 7.32 percent for the week of October 22, 2026, after sitting around 6 percent in early 2026[6]. On the $800,000 example above, 7.32 percent works out to about $5,495 a month in principal and interest.

For anyone who bought in November 2022 counting on a refinance, the window was narrow. The averages did dip toward 6 percent in early 2026[6], which may or may not have been enough to cover closing costs, depending on the loan. Buyers who bought because the payment worked at 7 percent were fine. Buyers who bought because they were sure rates would fall had a long wait.

If you want to see what today’s market looks like locally, our August 2026 Orange County housing market report is the most recent snapshot, and our post on the Fed rate cut and the Southern California housing market covers the 2024 turn. If you are weighing the decision itself, start with Should I Rent or Buy a Home? and, for first purchases, 10 Things Every First-Time Home Buyer Should Know.