The Quick Read: As of September 28, 2026, mortgage rates have climbed for at least four consecutive weeks and the Fed raised its benchmark rate on September 16 for the first time in more than three years. Builders are responding: NAHB’s September Housing Market Index shows 38% of builders cut prices and 66% offered sales incentives — the highest incentive share since December. For veterans, this moment is worth paying attention to, because the VA home loan benefit is designed for exactly this kind of market.
Key Takeaways
- Freddie Mac’s PMMS survey put the 30-year fixed at 7.03% for the week of September 24, up from 6.30% a year earlier — a 73-basis-point swing in twelve months.
- The Federal Reserve raised its target range by a quarter point to 3.75%–4.00% on September 16, in a unanimous 12–0 vote, citing elevated inflation.
- 66% of builders offered incentives in September, up from 63% in August, per NAHB — the highest share since December.
- New-home supply sits at 8.5 months and the median new-home price is 5.8% below a year ago, per the Census Bureau’s August release.
- The VA home loan is a reusable, lifetime benefit — not a one-time entitlement — and qualified disabled veterans may be exempt from the funding fee entirely.
What Changed This September
Four weeks of rising rates would get any buyer’s attention. What happened in September goes further than that.
The Freddie Mac PMMS showed the 30-year fixed moving from 6.71% the week of September 3 to 7.03% the week of September 24 — a 32-basis-point climb in three weeks on Freddie’s own published figures. A year ago, Freddie’s survey put the same loan at 6.30%. The 15-year fixed rose 16 basis points from the prior week alone, according to the same Freddie Mac PMMS release for the week of September 24.
The MBA’s Weekly Applications Survey, released September 23, tracked the same direction. Its contract rate for the 30-year fixed increased to 7.12% for the week ending September 18, up from 6.97% the prior week. Total applications fell 1.5% week-over-week. Purchase applications dropped 1%, and they sit 11% below the same week a year ago.
None of this happened in isolation. On September 16, the Federal Reserve raised its benchmark target range by a quarter point to 3.75%–4.00% — unanimous, 12–0 — and its statement said inflation remains elevated. According to CNBC’s reporting, it was the Fed’s first rate hike in more than three years. Sixteen of eighteen participants expected at least one more increase. The next FOMC meeting is October 28, per PNC’s economic research note from September 16.
Bond markets moved hard. The 10-year Treasury yield hit 5.104% on September 23 — its highest level since July 2007 — then pushed to 5.23% on September 25. Earlier in September it was trading just below 4.8%. That is a significant move in a matter of days, and it is part of why the Freddie survey’s weekly snapshots lag mortgage rates. Mortgage News Daily’s daily index, as reported by CNBC on September 24, rose 19 basis points in a single session to 7.45%, its highest reading since April 2024.
The Fed does not set mortgage rates. Long-term rates respond to bond-market supply, inflation expectations, economic strength, and investor demand for capital — factors J.P. Morgan Asset Management cited in its September FOMC commentary. The hike was a signal, not a direct lever. But the signal landed.
What It Means for Builder Inventory — and Why Veterans Should Care
Here is the other side of the rate story. When rates rise, buyer traffic weakens. When buyer traffic weakens, builders feel it fast.
NAHB’s September Housing Market Index fell three points to 32, its lowest reading since September 2025. NAHB Chairman Bill Owens said buyer traffic has weakened across much of the country, largely because of rising mortgage rates. Builders are responding with price cuts and incentives at a scale that matters.
Thirty-eight percent cut prices in September, up from 35% in August. The average cut was 6% — holding there for six consecutive months. Sixty-six percent offered sales incentives, up from 63% in August and the highest share since December. The Census Bureau’s August new-home sales report, released September 24, put the median new-home price at $393,700 — 5.8% below August 2025. Supply sits at 8.5 months.
One honest caveat: HousingWire reported in September that builder discounts are not reliably unlocking demand at scale. Census itself said the 6.4% month-over-month sales bounce it recorded was not statistically significant. And those contracts were signed before the latest rate move hit. So the discounts are real; the demand response is uncertain.
For veterans, though, the builder landscape creates something worth considering: a negotiating environment. NAR’s August existing-home sales report, released September 10, showed supply at 4.9 months — the highest in over ten years — and NAR’s chief economist noted that ample supply is giving buyers better opportunities to negotiate. On the new-construction side, builder concessions often come in the form of rate buydowns, closing-cost contributions, or free upgrades. A veteran buyer combining a VA loan with those builder incentives is stacking real financial leverage in a market where conventional buyers are pulling back.
The VA Loan Benefit Is Worth More at 7%
My read: the value of the VA home loan compounds when rates are high. Not because the rate itself is different — it tracks the broader market — but because the structure of the loan removes costs that non-veteran buyers cannot avoid.
No down payment required, subject to lender guidelines. No private mortgage insurance. And for veterans with a service-connected disability rating, the VA funding fee may be waived entirely — that fee, which is otherwise charged as a percentage of the loan amount, is the one upfront cost the VA loan carries. Waiving it is meaningful.
The VA home loan is also not a one-time benefit. VA News clarified on September 15 that a veteran can use the loan benefit more than once. In many cases, a veteran can keep a current home and use remaining entitlement to purchase another. Restored entitlement counts. This is a widely misunderstood point: the benefit is a lifetime tool, not a single draw.
For veterans navigating the fall market, that means a few things in practice. First, a VA loan eliminates the down-payment hurdle that is stopping many conventional buyers from acting at these prices. Second, the absence of PMI reduces the monthly carry on a purchase relative to an FHA or conventional loan with less than 20% down. Third, the reusability of the benefit means a veteran who already owns a home may still have access to VA financing — depending on their entitlement situation — for a second purchase. What any individual qualifies for depends on their specific service history, entitlement status, and the lender’s review of their file. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
If you want to understand which programs fit your situation right now, Lendmire’s loan options page lays out what is currently available — no guessing from a dated screenshot.
The Foreclosure Protection Layer
One item that did not make many headlines: the VA launched its Partial Claim program for submissions starting June 15, 2026. Servicers have until November 28, 2026 to implement it fully, per the Consumer Finance Monitor’s reporting from June 2. It is a foreclosure-avoidance tool — not a purchase benefit — but it matters for veteran homeowners in a rising-rate environment where refinancing out of distress is harder than it was two years ago.
The program’s scope and how it applies to any individual borrower depends on their servicer’s implementation and their specific loan situation. The point here is directional: the VA has added a protection layer for existing VA borrowers at a moment when refinancing is not an easy out. Refinance applications, per the MBA’s September 23 survey, are running 62% below a year ago.
The Self-Employed and Investor Side
Not every veteran reading this is a W-2 employee buying a primary residence. Some are self-employed. Some own investment properties. The market picture shifts there too.
MCT, a secondary-market analytics firm, noted in its September 2026 update that non-QM demand — that is, financing that does not rely on conventional income documentation — keeps rising month after month. MCT also flagged that DSCR loans (which qualify on a rental property’s income rather than the borrower’s personal income) and full-doc loans are performing better than self-employed borrower loans in the investor channel. That is a qualitative read from one secondary-market source, not a broad-based finding, but it tracks with what the rate environment does to underwriting appetite: when yields rise, investors in mortgage-backed securities get more selective. Self-employed veterans looking at non-QM financing should factor tighter investor appetite into their timing.
For self-employed veterans, a CPA letter can be part of the income picture. How that document is structured matters — our piece on “Can A CPA Letter Cut The Expense Factor On A Second-home Loan?” is worth a read before that conversation with any lender.
My Take
Here is what I think the current moment adds up to for veteran buyers.
Rates are at their highest in over a year and the Fed has signaled at least one more increase may be coming. That is not a comfortable backdrop. But builder concessions are real, existing-home supply is at a decade-plus high, and the VA home loan removes two of the biggest friction points — the down payment and PMI — that are keeping non-veteran buyers on the sideline.
The buyers I expect to move this fall are not the ones waiting for 2021 to return. They are the ones who look at today’s builder concessions, price their purchase at today’s cost of money, and use the VA benefit to do what it was designed to do: close the gap between what they can afford and what the market is offering.
The buyers who wait for rates to drop before even starting the conversation are making a bet on timing. The veteran buyer who starts the process now has something nobody can time — a benefit that does not expire, a builder market leaning toward incentives, and a negotiating window that did not exist eighteen months ago.
One practical point on rates: if you are quoted a rate you are comfortable with, locking it removes the risk of further moves upward before your closing. If you float, you are betting rates ease. With 64% FedWatch odds of another October hike, per CNBC’s September 26 reporting, that is not a low-stakes bet. Not advice to buy or sell anything — just how I read the data sitting in front of me today.
If you are weighing a purchase this fall, Lendmire can walk through how the current programs fit your file. Reach us at 828-256-2183.
For the end-to-end picture of how DSCR loans work — qualification, structures, and the full process — see Lendmire’s complete DSCR loans guide.
Frequently Asked Questions
Can I use a VA loan if I already own a home with a VA loan?
Yes — the VA home loan is a reusable, lifetime benefit. VA News confirmed on September 15 that in many cases a veteran can keep an existing home and use remaining or restored entitlement to finance another purchase. The specifics depend on your entitlement balance and your lender’s review of the file.
Does a service-connected disability affect the VA funding fee?
Qualified veterans with a service-connected disability rating may be exempt from the funding fee, subject to VA eligibility rules and lender program guidelines. That exemption can reduce the upfront cost of a VA purchase significantly compared to a non-exempt borrower’s file.
Are builders actually cutting prices, or is this headline noise?
The NAHB data is real: 38% of builders cut prices in September, with an average cut of 6% for the sixth straight month, and 66% offered sales incentives. That said, HousingWire reported in September that discounts are not reliably translating into a demand surge. The concessions are available; whether they close deals depends on the buyer’s specific situation and financing.
What is the VA Partial Claim program?
It is a foreclosure-protection tool for existing VA borrowers, not a purchase benefit. Submissions opened June 15, 2026, and servicers have until November 28, 2026 to implement it. It is designed to help veteran homeowners facing financial hardship avoid foreclosure when refinancing is not viable. Eligibility and terms depend on the servicer and the borrower’s specific loan situation.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage brokerage whose founder writes this column. DSCR investor programs reach 41 markets, including Washington, D.C.; consumer programs such as bank statement, HELOC and down payment assistance loans are arranged in 16 states; every loan is placed with, and underwritten by, a wholesale lender under that lender’s guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. NAHB Housing Market Index press release — September 16, 2026
2. Freddie Mac PMMS — week of September 24, 2026
3. Federal Reserve FOMC statement — September 16, 2026
4. HousingWire — Why builder discounts are not unlocking demand, September 2026
This article is part of Lendmire’s Mortgage News series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: The September Home Search: More Inventory, Builder Incentives, Higher Rates · Down Payment On A House, September 2026: Rising Rates, Builder Incentives · Cash To Close In September 2026: Where Builder Credits And Rising Rates Collide
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.