The Quick Read: Owners hold more equity than at any point on record, and that is the real payoff of owning. As of September 28, 2026, mortgage rates have risen four weeks running and the Fed has hiked for the first time since 2023. A fixed payment and slow equity build are worth more when borrowing costs float higher. The catch is that a growing group of recent buyers is underwater.
I’m writing this column as of September 28, 2026. The market is sending mixed signals, so I’ll take them one at a time.
Key Takeaways
- Owners with a mortgage hold roughly $18 trillion in equity, a record by two separate measures.
- Freddie Mac’s 30-year average has risen four straight weeks, about 37 basis points since late August.
- The Fed raised its target range on September 16, 2026, its first increase since 2023.
- Underwater borrowers are rising from a small base, mostly among recent FHA and VA buyers.
- Inventory is up and buyers have more room to negotiate, but prices are still rising nationally.
What Changed This Month
Rates rose for a fourth straight week. Freddie Mac’s survey put the 30-year fixed at 7.03% for the week of September 24, 2026, up from 6.95% the week before. A year ago the same survey read 6.30%. The four weekly moves were 5, 5, 19 and 8 basis points, per Freddie’s releases for September 3, 10, 17 and 24. That adds up to about 37 basis points from 6.66% on the week of August 27. A basis point is one-hundredth of a percentage point.
The Mortgage Bankers Association’s weekly survey, released September 23, 2026, showed its 30-year contract rate at 7.12%, up from 6.97%. Its chief economist called that the highest since May 2024. Applications fell 1.5% for the week ending September 18. Refinance activity was 62% below a year earlier.
Different publishers, different numbers. Freddie’s is a weekly average for well-qualified conventional borrowers. The MBA’s comes from applications. Mortgage News Daily runs a separate daily index. Don’t mix them in one sentence, and don’t treat any of them as a quote.
The Fed hiked. The Federal Reserve’s statement on September 16, 2026 raised the target range by a quarter point to 3-3/4 to 4 percent. The vote was 12–0. CNBC called it the first increase since 2023.
The 10-year moved more than the Fed did. FRED shows the 10-year Treasury yield at 5.18% on September 24, 2026. The MBA said it sat around 4% in February. The MBA’s chart of the week ties mortgage rates being about a full point higher than early 2026 to energy prices from the war in Iran, inflation, expected tighter policy and federal debt.
That is my first point. The Fed does not set mortgage rates. Mortgage rates follow longer-term yields, and those moved on their own.
Equity hit a record. Cotality reported on September 10, 2026 that equity for borrowers with a mortgage reached $17.9 trillion. Total homeowner equity climbed to a new high as well, and the average loan-to-value ratio across homeowners remained modest. ICE’s Mortgage Monitor, reported August 10, 2026, put mortgage-holder equity at $18 trillion for the first time in the second quarter.
The other side of the ledger. That same ICE report found underwater borrowers up 44% from a year earlier, to 813,000. About 320,000 of them were also behind on payments. Inman reported on August 11, 2026 that the group is concentrated in FHA and VA loans from 2022 through 2025. Cotality, using a different measure, shows only 2.1% of mortgages underwater. The two figures are not directly comparable. Both can be true.
What Does This Mean for Home Buyers?
Record equity is a fact about people who bought years ago. It is not a promise about what you will earn on a purchase today.
Buyers are feeling the rate move. The MBA’s September 23 release put purchase applications 11% below a year ago, before seasonal adjustment. Adjustable-rate mortgages reached a 9.8% share of applications. That tells me buyers are reaching for a lower starting cost and accepting that the rate can change later.
Sales are soft. NAR’s report on September 10, 2026 showed August existing-home sales down 2.0% from July, at an annual pace of 3.98 million. Supply reached 4.9 months, up from 4.6 in July. NAR’s chief economist said ample supply gives buyers better opportunities to negotiate.
Prices did not fall, though. NAR’s median was $429,100, up 1.6% from a year earlier, the 38th straight year-over-year gain. More inventory is not the same as falling prices. It means more choice and more room to bargain on terms.
The Benefits, Ranked by How They Hold Up Now
The benefits of owning are real. Some are holding up better than others this month.
Equity built over time. Each payment pays down principal, and prices have risen year after year in NAR’s series. This is the benefit the record-equity headlines describe. It rewards patience. It punishes someone who buys at the top and must sell in a hurry.
A fixed payment. With a fixed-rate loan, principal and interest do not move for the life of the loan. Floating-rate debt cannot say that. When the Fed hikes and the 10-year jumps, a fixed-rate owner watches from the sidelines. A renter faces whatever the landlord decides at renewal. An adjustable borrower faces the reset. It is the quiet benefit, and it looks better every time rates climb.
Stability and control. You decide how long you stay and what you change. Nothing in this month’s data moves that.
Borrowing against what you own. Cotality counts $11.5 trillion in tappable equity, meaning the amount owners could borrow against while keeping a cushion. Existing owners can use it. But refinancing is at its slowest pace since February 2025, per the MBA’s chief economist, so tapping it costs more than it did a year ago.
| Benefit | Holding up this month? | Main risk |
|---|---|---|
| Equity build | Yes, record totals | Buying with thin cushion |
| Fixed payment | Stronger as rates rise | Locking in at a high point |
| Stability | Unchanged | Life changes before break-even |
| Equity access | Costlier | Refinance activity is depressed |
My Take
Here is my read. The record-equity headline and the rising-rate headline are the same story. Owners who bought earlier hold big cushions and cheap fixed debt. Buyers arriving now face the opposite setup.
That does not make buying a mistake. It changes what you are buying. A purchase at today’s financing costs is a long-term hold, not a quick flip on appreciation. If you need the price to jump for the math to work, skip it.
I also think the underwater numbers deserve more attention than they get. Record equity in aggregate hides a thin-cushion group: buyers from 2022 through 2025, heavily in FHA and VA loans, many with little room if prices dip locally. I’m not saying a wave is coming. The 2.1% share is small. The 44% jump in the count is the trend to watch.
Another thing I’d push back on: the idea that the Fed’s hike is what lifted mortgage rates. The 10-year moved before and after the meeting. Anyone waiting for a Fed cut to rescue mortgage rates may be waiting on the wrong lever. The Fed’s own projections are split. On 2027, CNBC reported eight officials pointing to another hike, six to a hold and four to cuts.
What I’d Do Now
Decide on the holding period first. Ownership pays off over years. If you might move soon, renting may fit better, and there is no shame in that.
Keep a cushion. The underwater data shows what happens to thin-margin buyers when the market softens. Think about what you would do if the house lost some value and you still had to stay.
Use the leverage you have. With supply at its highest reading in over a decade, ask for repairs, credits or flexibility on terms. Price is not the only thing on the table.
Treat an adjustable loan as a bet. Nearly one in ten applications is an ARM. It can make sense if you will sell or refinance before the reset. Know the cap and the date. If you cannot absorb the payment moving, choose the fixed loan.
Lock when you like the deal. A lock holds your quoted terms for a set period while you finish the purchase. Floating means leaving that to chance. Rates have climbed four weeks in a row, and I can’t tell you next week’s direction. If the deal works today, lock it. Quotes gathered on different days are not comparable, so get them close together.
Look at the full menu. Different loans suit different files, including self-employed borrowers who document income in other ways. Our loan options page carries the current guidelines, subject to lender guidelines and credit review. For more on how owners and rates interact, see my earlier piece on record home equity meeting rising rates.
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.
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
Is now a bad time to buy because rates keep rising?
Not automatically. Rates have risen for four weeks, but sellers are giving buyers more room on terms, and supply is at its highest reading in over a decade. The better question is whether you can hold the home for years. If you can, the rate is one input, not the whole decision.
Does record equity mean my home is safe from falling in value?
No. The record is an aggregate. ICE found underwater borrowers up 44% from a year earlier, mostly recent FHA and VA buyers. Your cushion depends on when you bought, what you put down and what your local market does.
Will the Fed’s hike push mortgage rates up further?
Not directly. Mortgage rates track longer-term yields like the 10-year Treasury, which FRED shows at 5.18% on September 24, 2026. The Fed’s September 16 move was one factor among several. The MBA also points to energy prices, inflation and federal debt.
Why do the quoted figures differ between sources?
Each publisher measures something different. Freddie Mac reports a weekly average for well-qualified conventional borrowers. The MBA reports a figure drawn from loan applications. Mortgage News Daily publishes a daily index. None is a quote for your loan, which depends on your file.
Does rising inventory mean prices will fall?
Not so far. More listings give you more choice and negotiating room, but national prices have not turned down in NAR’s data, where the median price for August was still up from a year earlier.
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Lendmire (NMLS# 2371349) is a non-QM mortgage brokerage arranging DSCR investor loans in 41 markets — 40 states plus Washington, D.C. — and consumer mortgage programs, including bank statement, HELOC and down payment assistance options, in 16 states through wholesale lenders. Lendmire is the broker, never the lender; every file is underwritten by the lender under its own guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. MBA Weekly Applications Survey, September 23, 2026
3. Federal Reserve FOMC statement, September 16, 2026
4. CNBC, Fed decision, September 16, 2026
5. Cotality Home Equity report, Q2 2026
6. ICE Mortgage Monitor via RealEstateNews
8. NAR August existing-home sales
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: Save For A Home In September 2026: Rates Rose Four Weeks Running · Preparing Financially For Homeownership As Rates Climb, September 2026 · FHA Mortgage Insurance Costs More When Rates Keep Climbing
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.