The Quick Read: As of September 28, 2026, the score you need still depends on the loan program, but the payment you can carry now decides more files than the score does. The Fed raised rates a quarter point on September 16, and Freddie Mac’s 30-year average has climbed four weeks in a row. Clearing a score cutoff gets you in the door. Whether the monthly cost fits your income is the real test.
Eighteen years in lending teaches you that a credit score is a gate, not a verdict. This month the gate got narrower for a different reason. It isn’t that lenders moved the bar. Money got more expensive, and the same score now buys a smaller purchase.
Key Takeaways
- The Federal Reserve raised its target range by a quarter point on September 16, 2026, in a 12–0 vote.
- Freddie Mac’s 30-year average has risen every week since its September 3 print. That is four straight increases.
- Your score decides which programs you can use. Your debt-to-income ratio, which compares monthly debts to monthly income, decides how much house you can buy.
- Builders are cutting prices and offering incentives, and existing-home supply is at a decade-plus high. That gives you room to negotiate.
- Lenders trimmed flexible-documentation programs in August, which matters if you are self-employed.
What Changed: The Dated Facts
The Fed hiked. The FOMC statement of September 16 lifted the federal funds target range to 3-3/4 to 4 percent. CNBC called it the first rate hike in more than three years, and reported that 16 of 18 committee participants expected another increase.
Mortgage rates were already moving. Freddie Mac’s survey put the 30-year fixed at 7.03% for the week of September 24, up from 6.95% the week before. A year earlier it averaged 6.30%. That is 73 basis points higher. A basis point is one hundredth of a percentage point.
The weekly path shows the pace:
- Week of September 3: up 5 basis points.
- Week of September 10: up 5 basis points.
- Week of September 17: up 19 basis points, the first survey after the hike.
- Week of September 24: up 8 basis points.
Two cautions on those numbers. First, Freddie’s survey describes conventional, conforming purchase loans for borrowers who put 20% down and have excellent credit. It is a best-case benchmark. Second, it averages a lagging window. Mortgage News Daily’s index was already up to 7.45% on September 24, and its daily page showed the average lender at 7.50% as of September 28, the first time since April 30, 2024. The gap between those figures is timing and method, not a contradiction. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
The MBA’s weekly survey tells the same story from the borrower side. For the week ending September 18, its 30-year conforming contract rate rose to 7.12% from 6.97%. Refinance applications ran 62 percent below a year earlier. The unadjusted purchase index was 11 percent lower than a year ago.
Does the Fed Set Mortgage Rates?
No. The Fed sets a short-term rate. Mortgage rates track long-term yields, which the Fed influences but does not control. NAA made the same point in its commentary on the Freddie Mac survey. Rates moved sharply before and after the hike because the bond market was pricing in the hike and more.
This matters for your planning. Waiting for the Fed to “cut back” is not a strategy. The Fed’s next meeting is October 28, and the projections point to more tightening, not less. I would not build a purchase plan around a rate call. Build it around a payment you can carry.
What It Means for Home Buyers
Here is the shift. When rates were lower, a score cutoff was often the main hurdle. You cleared it, and the payment mostly took care of itself. With rates up 73 basis points in a year, the order flips. A borrower can clear the score line and still miss on the payment-to-income math.
Say you were pre-approved in the spring at a certain price. Run the same file today. The score is unchanged. The rate is not. The price range that fit your income in April may not fit now. That is not a credit problem. It is arithmetic.
A plain hypothetical shows the size of the move. If a rate goes from 6% to 7%, the difference is a full point, and a full point on a 30-year loan changes what a given income supports by a meaningful amount. I’m not quoting a payment here, because the lender’s quote for your file is what counts.
Freddie’s benchmark also hides a spread. Borrowers with lower scores or thinner documentation are not what that 7.03% measures. A lower score generally means a higher quoted cost on the same day. So the score still matters. It just matters through the price of the loan as much as through the yes-or-no cutoff.
Program choice still follows the score
Conventional, FHA, VA and other programs each look at credit differently, and each has its own guidelines. I won’t put numbers on them here, because the guidelines change and the page that carries them is the source of truth. You can see how the programs are laid out on our loan options page, subject to lender guidelines.
The government-backed share of applications is a useful marker of who is still buying. In the MBA’s September 23 release, FHA was 16.7 percent of applications, down from 16.9, and VA was 12.0 percent, down from 12.4. Both remain a large slice of the market.
Credit availability is thinning at the edges
The MBA’s Mortgage Credit Availability Index fell 1% to 107.3 in August. The MBA’s Joel Kan tied the drop to lenders cutting programs that require flexible documentation, along with cash-out refinance loans. Scotsman Guide noted July had been a four-year high, so this is a pullback from a peak, not a collapse.
If you’re self-employed, read that twice. Programs built on bank statements or other alternative documentation are the ones being trimmed. One month of data is not a trend. But it is a reason to get your file in front of a broker sooner rather than later.
Where Buyers Have Leverage
You have more room to negotiate than you did a year ago. That is the good news in a tough month.
NAR’s August existing-home sales report, released September 10, showed sales down 2.0% from July, at a seasonally adjusted annual rate of 3.98 million. Inventory hit 1.62 million units, up 5.9% from a year earlier. Supply stood at 4.9 months, its highest in over ten years. NAR chief economist Lawrence Yun said the ample supply is giving homebuyers better opportunities to negotiate. The median existing-home price was $429,100, up 1.6% from last year.
New construction is where the price movement is. Census reported August new-home sales at a 684,000 annual rate, with 8.5 months of supply and a median price of $393,700. Census flags the year-over-year price decline of 5.8% as within its margin of error, so don’t read it as a clean cut. Inman, citing the NAHB and Wells Fargo builder survey, reported that 38 percent of builders cut prices in September and 66 percent used sales incentives, the highest since December. The average cut held at 6 percent for a sixth straight month.
Here’s the catch. Incentives are part of the deal, and many come as rate buydowns, which are paid by the builder to lower your rate for a period. They can help your payment. They can also be traded against a lower price. Ask for both on paper and compare.
And keep the other side in view. Realtor.com named September 27 to October 3 the most favorable week of the year to buy, with up to 31.9% more active listings than at the start of the year. Yet active listings are still about 11% below pre-pandemic levels, and its economist said elevated rates leave buyers little relief on the financing side. Leverage on price, not on financing.
My Take
My read: this is a payment market, not a score market. I think buyers who obsess over squeezing out a few more points before applying are watching the wrong dial. Score work still pays off. But if you’re already in a solid range for your program, the bigger lever is the price you pay and the structure you choose.
I’d also push back on two misreadings I expect to see this fall. The first is that a rebound in new-home sales means the market is healing. New-home sales rose 6.4% in August, with a wide margin of error, while existing sales fell for a second month. One month is not a turnaround. The second is that supply means buyers hold all the cards. Supply is high by recent standards. It is still thin against the years before the pandemic.
Honestly, this one is a toss-up for some buyers. Waiting could bring better prices, since builders are already cutting. It could also bring higher rates, since 16 of 18 Fed participants expected another hike. I can’t tell you which wins, and no one else can either.
What I’d Do Now
Get your real numbers, not the benchmark. Freddie’s 7.03% is not your quote. Ask a broker to price your actual file, with your score and your documentation, on a single day.
Compare quotes from the same day. Rates moved by nearly 20 basis points in a single day this month. Two quotes gathered a week apart are not comparable.
Understand what a lock does. A rate lock holds a quoted rate for a set period while your loan is processed. Floating means leaving it unlocked and taking the market as it moves. In a market that has climbed four weeks running, floating is a bet. If you like the deal and the payment fits, lock it.
Set your payment ceiling first. Decide the monthly cost you can carry, then work back to a price. Don’t work forward from the maximum a lender will allow.
Use the negotiating room. Ask sellers and builders for price cuts and closing help. Get incentives in writing.
If you’re self-employed, check your options early. Flexible-documentation programs are being trimmed. Read our piece on credit score requirements for self-employed home equity lines if your income runs through a business.
If you own a home with equity, know that rate-driven refinancing has largely dried up. Our column on record home equity meeting rising rates covers that side.
If you’re weighing a purchase or a refinance this fall, Lendmire can walk you through how the current programs fit your file. Call 828-256-2183 or request a quote.
For the end-to-end picture of how these loans work — qualification, structures, and the full process — see Lendmire’s complete DSCR loans guide.
Frequently Asked Questions
Does the Fed hike change the credit score I need?
Not directly. Program guidelines set the score requirements, and those didn’t change on September 16. What changed is the cost of borrowing. With the 30-year average at 7.03% per Freddie Mac for the week of September 24, a file that cleared easily earlier this year can be tighter on payment-to-income.
Is 7.03% the rate I will get?
No. Freddie Mac’s figure is a weekly average for conventional, conforming purchase loans with 20% down and excellent credit. Daily indexes ran higher this week, and a lower score or thinner documentation typically means a higher quote. Your quote comes from pricing your actual file.
Should I wait for rates to fall before buying?
I can’t call the direction, and the Fed’s own projections point toward more hikes, not cuts. Waiting may bring price cuts from builders and sellers. It may also bring higher financing costs. Decide on the payment you can carry today, and keep the lock decision separate from the buy decision.
Are builder incentives worth taking?
Often, yes, but compare them to a straight price cut. A published survey reported by Inman on September 25 showed 66 percent of builders using incentives. Many are rate buydowns that lower your cost for a period, not the life of the loan. Get the offer in writing and compare both versions.
Can I still qualify if I’m self-employed?
Programs exist, but the MBA said lenders trimmed flexible-documentation offerings in August. Availability varies by lender and is subject to lender guidelines. Start the conversation early, and check the loan options page for how the programs are described.
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. Federal Reserve FOMC statement, September 16, 2026
2. CNBC: Fed rate decision, September 2026
3. Freddie Mac Primary Mortgage Market Survey
4. MBA weekly applications survey, September 23, 2026
5. HousingWire: mortgage credit availability fell in August
6. Scotsman Guide: mortgage credit availability slips after July swell
7. NAR existing-home sales, August
8. Inman: new-home sales, August 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: What Credit Score Do I Need to Get a Mortgage? · Credit Health and Mortgages: What to Know Before You Apply · How to Improve Your Mortgage Approval Chances
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.