The Federal Reserve held its ground again at the end of July, keeping the federal funds rate parked between 3.50% and 3.75% on a divided vote. Translation for anyone financing a deal: “higher for longer” isn't a phase, it's apparently a personality trait. Commercial mortgage rates are sitting north of 5.5% in the best financing scenarios, and comfortably higher for everything else.
Here's what's genuinely interesting: none of that has slowed Houston down. Coterra Energy and Devon Energy agreed to a $58 billion merger that lands the combined company's headquarters right here, pushing Houston's Fortune 500 count to 28. Siemens Energy is pouring roughly $1 billion into expanded local operations to keep pace with data center power demand. Capital is still moving. It's just moving with better underwriting and a lot less patience for weak deals.
That's the real lesson of a higher-rate environment: it doesn't freeze a market, it filters it. Buyers who need aggressive leverage to make a deal pencil are sitting on the sidelines, waiting for a cut that keeps not arriving. Buyers with real capital and a clear thesis — energy, industrial, anything tied to the port's ongoing expansion — are moving forward, because they were never planning to depend on the Fed to make their math work.
If you're an owner sitting on a loan maturity in the next 12 to 18 months, don't wait for relief that may not come on your timeline. Model your refinance at today's rates, not last year's, and have the equity conversation early rather than as a surprise at the closing table.
Rates aren't the obstacle in this market — indecision is. The deals getting done right now belong to the people who stopped waiting for permission from the Fed and started calling their broker instead. Just saying.