The Quick Read: As of September 28, 2026, the Fed has raised its target range by a quarter point, and Freddie Mac’s 30-year average has risen five weeks running. Fixed-rate loans cost more to lock. Adjustable-rate loans and home equity lines float with a higher benchmark. Refinance demand has dropped hard from last year. Pick the type you can carry if the payment moves against you.
I wrote the lead-in for the reader in a hurry. The rest of this column is for the reader who wants the reasoning, so let’s get into it.
Key Takeaways
- The Federal Reserve voted 12–0 on September 16 to raise the target range by a quarter point, to 3-3/4 to 4 percent.
- Freddie Mac’s 30-year average rose for a fifth straight week on September 24. Some coverage a week earlier said four. The count is now five.
- Adjustable-rate loans are gaining share, and refinance applications sit far below last year’s pace.
- A fixed loan buys certainty. An adjustable loan buys a lower start and a bet on your holding period. A home equity line floats.
- Each type fits a different borrower. Match the type to the payment you can carry, not to the headline.
What Changed
The Fed raised rates, and mortgage rates were already climbing. The FOMC’s September 16 statement put the target range at 3-3/4 to 4 percent, up a quarter point, on a unanimous 12–0 vote. CNBC called it the first hike in more than three years, and reported that 16 of 18 dot-plot participants expect another one.
Here’s the catch for anyone who thinks the Fed sets mortgage rates. It doesn’t. The Fed moves short-term rates. Fixed mortgage rates follow the 10-year Treasury and the market for mortgage-backed securities. Freddie Mac’s 30-year was already rising before the meeting. It went from 6.66% to 6.76% between the August 27 and September 10 surveys.
Then the climb sped up. Freddie Mac’s survey put the 30-year fixed average at 7.03% for the week of September 24, up 8 basis points from 6.95% the week before. A year earlier it was 6.30%, according to the same survey. Coverage of that print called it the first reading above 7% since January 2025. For the same week, Freddie Mac’s survey put the 15-year at 6.42%, up from 6.26% the week before.
Zoom out over the month. Freddie Mac’s 30-year was 6.71% in the September 3 release. That is 32 basis points below the September 24 print. The biggest single jump, 19 basis points, came in the week of September 17.
Treasury yields did the heavy lifting. CNBC reported that the 10-year yield hit its highest level since June 2007 on Thursday, September 24, before easing, and that yields rose again on Monday, September 28. I’m not printing a precise 10-year figure because I haven’t verified one at the source. The direction is enough.
One more caution. Different surveys report different numbers, and they are not interchangeable. The MBA’s weekly survey, released September 23, put the 30-year fixed at 7.12%, the highest since May 2024, per HousingWire’s coverage. Freddie Mac’s figure is a weekly average of conventional, conforming, fully amortizing purchase loans. Method and timing differ, so don’t compare the two line by line.
Where Is Demand Going?
Demand is moving away from refinancing and toward adjustable rates. The MBA’s weekly survey for the week ending September 18, released September 23, showed the composite index down 1.5%. The Refinance Index fell 3% on the week and sat 62% below a year earlier. The seasonally adjusted Purchase Index fell 1%. The unadjusted Purchase Index was 11% below a year earlier. The adjustable-rate share of applications rose to 9.8%.
Context matters on that refinance number. The MBA’s survey for the week ending August 28 had refinances 19% below a year earlier. So the gap went from 19% to 62% in three weeks. Part of that is the hike. Part of it is that rates were much lower in September 2025, which makes last year a high bar. I can’t tell you the split, and I’d be wary of anyone who says they can. The MBA also notes a Labor Day adjustment in the September 11 week, so week-to-week comparisons around that date are noisy.
Sales tell the same story from the other side. NAR’s report on August existing-home sales, released September 10, showed sales down 2.0% from July and 1.2% from a year earlier. The national median price was $429,100, up 1.6% from a year ago, the 38th straight annual gain. Supply stood at 4.9 months, against 4.6 months in July and a year ago. HousingWire noted that the annualized sales pace of 3.98 million was the first reading below 4 million since June 2025, with inventory at 1.62 million.
Read together: buyers have more choice and pay more to borrow. NAR’s September 10 report predates the hike, so the next release, due October 13, is the first look at sales after it.
The Main Mortgage Types, One at a Time
Five structures cover most of what buyers and owners actually use: fixed-rate, adjustable-rate, government-backed, jumbo, and home equity lines. Each reacts differently to a higher benchmark. Our loan options page carries the current guidelines for the programs we broker. This column sticks to how each type behaves.
Fixed-Rate Loans
A fixed-rate loan keeps the same interest rate for the whole term. That is the whole appeal. The payment on principal and interest never moves, no matter what the Fed or the Treasury market does next.
The price of that certainty is the starting rate. It tracks long-term yields, and long-term yields just hit multi-year highs. So the fixed loan costs more to lock this month than it did a month ago. A shorter term, like the 15-year, carries a lower average rate than the 30-year in Freddie Mac’s September 24 survey, though it asks for a bigger monthly commitment. Whether that trade works depends on your budget, not on a headline.
My view: a fixed rate is the right default for anyone who plans to stay put and whose budget has no slack. If one more surprise would hurt, fix it.
Adjustable-Rate Loans
An adjustable-rate mortgage, or ARM, holds a fixed rate for an opening period, then resets on a schedule tied to a benchmark. A 5/1 ARM is fixed for five years, then adjusts yearly.
The MBA’s chief economist, as reported by HousingWire on September 23, said 5/1 ARM rates were more than a percentage point below fixed rates. That gap explains why the ARM share of applications rose to 9.8%. It is a real saving during the fixed period.
But “an ARM is always cheaper” is a misreading. The opening rate is lower. The cost after the reset depends on where rates are then and how long you hold the loan. If a rate resets from 6% to 7%, that is a full point added to a payment that was built on the lower number. An ARM fits a buyer with a defined holding period shorter than the fixed window, or one whose income has room to absorb a reset. It fits poorly for someone stretching to qualify.
Government-Backed Loans
FHA, VA and USDA loans are insured or guaranteed by federal agencies. They exist to widen access, usually with a smaller down payment or looser credit standards than conventional loans. Each has its own insurance or fee structure and its own property rules. The current figures live in the program pages, not here.
I’ll make one point about them in this market. Their rates also follow the bond market. The hike doesn’t make them cheaper or dearer relative to conventional loans on its own. What it changes is the margin for error. When rates are higher, a buyer relying on a smaller down payment has less cushion, so the total monthly cost deserves a hard look, including any mortgage insurance.
Jumbo and Non-QM Loans
Jumbo loans cover amounts above the conforming limit. Non-QM loans qualify a borrower on something other than standard documentation, such as bank statements, assets, or, for investors, a property’s rental income. Our guide to the most common DSCR application mistakes covers that last group.
Freddie Mac’s survey covers conventional, conforming loans for borrowers with excellent credit and a 20% down payment. So 7.03% is not what every borrower pays. Non-QM pricing is separate, and I don’t have a sourced figure for it, so I won’t guess. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
On the tone of that market, MCT’s September 28 commentary says non-QM and home equity activity stay strong, and that DSCR and full-documentation loans are outperforming self-employed loans on credit. It describes investors as more selective. Those are qualitative notes from one advisory firm, not a forecast. For background, a June 30 HousingWire item reported a major bank’s research arm projecting 2026 non-QM production of $175 billion, against $108 billion in 2025. That is older than 45 days, so treat it as background.
Home Equity Lines and Second Liens
A home equity line of credit, or HELOC, lets you borrow against your home’s value as needed. Most float with a benchmark. So the Fed hike raises them directly, which a fixed mortgage does not. I have no sourced HELOC rate level, so I’m giving you the mechanism instead of a number.
Why are second liens gaining share? Because many owners hold a first mortgage they don’t want to give up. MCT’s commentary says the incentive to refinance a low-rate first mortgage is small. A HousingWire item on a white paper, dated September 14, said homeowners held $34.9 trillion in equity in the first quarter of 2026, with about $11 trillion tappable. It also said nonbank HELOC originations grew about 140% from 2023 to 2025.
Borrowing against that equity at a floating rate is a different risk from a fixed refinance. If the Fed hikes again, the line gets dearer. Owners should size it for the payment they can carry after another move.
A Quick Comparison
| Type | Rate behavior | Best fit |
|---|---|---|
| Fixed-rate | Locked for the term | Long hold, tight budget |
| ARM | Fixed, then resets | Short, defined hold |
| Government-backed | Follows bond market | Smaller cash at purchase |
| Jumbo / non-QM | Priced separately | Larger or non-standard files |
| HELOC | Floats with benchmark | Owners with equity and slack |
What Does It Mean for Home Buyers?
For buyers, the hike raises the cost of certainty and the risk of flexibility. Pay for certainty, and you pay a higher starting rate. Take flexibility, and you carry reset risk. Neither is free, and neither is wrong.
The honest question is what payment you can carry in the worst reasonable case. Start there. Then pick the type that keeps you inside it.
Two things work in a buyer’s favor. First, choice: NAR’s supply figure of 4.9 months is higher than a year ago, so buyers aren’t bidding against a thin market. Second, rates are not a one-way door. Many buyers who purchase now will have the option to refinance later if rates fall. I’d treat that as a possibility, not a plan, and never build a budget on it.
It’s also true that waiting has a cost of its own. Forecasters disagree. Realtor.com’s economist expects rates to rise, while Zillow sees a dip toward 6.7% by year-end, per the September 24 coverage I reviewed. Two credible views, opposite directions. That’s what uncertainty looks like. Don’t let a forecast make your decision.
Owners face a different question. With refinance demand this far below last year’s, the question isn’t “should I refinance?” for most people who hold a low-rate first mortgage. It’s “do I need cash, and what’s the most affordable, least risky way to get it?” Our column on cash-out versus rate-and-term refinancing walks through that choice.
My Take
My read is that the market is repricing for another hike, and buyers should not assume a quick reversal. That’s an opinion, and here is why I hold it.
CNBC’s report says 16 of 18 dot-plot participants expect another hike. Secondary sources I reviewed put the odds of an October increase at roughly two in three. The Fed’s next meeting is October 27–28. I can’t verify those odds at the primary source, so weigh them lightly. But the direction of the dots is clear.
Here’s where I’m less sure. Mortgage rates follow the 10-year Treasury more than the overnight rate. So how much of this move is the Fed, and how much is Treasury supply, oil and inflation worry? Honestly, I don’t know. Anyone claiming certainty about the split is guessing. If the bond market calms, mortgage rates could ease even with the Fed on hold. If it doesn’t, another hike won’t help.
So what do I tell buyers? Stop waiting for the spring of 2021. Price the home at today’s cost of money. If the numbers only work at last year’s rates, they don’t work.
What I’d Do Now
Decide on the payment first, then the type. These are practical steps, not advice to buy or sell anything.
1. Stress-test the payment. Ask what happens if an adjustable rate resets a point higher, or if a floating line rises after another hike. If the answer hurts, choose a fixed structure.
2. Match the type to the holding period. A short, defined stay is where an ARM can make sense. An open-ended one favors fixed.
3. Lock when the deal works. A rate lock is an agreement that holds your rate for a set period while the loan moves forward. If a payment works today and a rise would break it, lock it. Floating is a bet on the bond market, and I don’t recommend betting what you can’t afford to lose.
4. Compare quotes from the same day. Quotes gathered on different days aren’t comparable, and in a month like this one a few days can move the number. Line them up side by side.
5. Keep equity borrowing conservative. Size any HELOC for the payment after another Fed move, not today’s.
6. Ask what the survey doesn’t cover. Freddie Mac’s average describes one slice of borrowers. If your file is self-employed, investor, or otherwise non-standard, the average isn’t your benchmark.
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 to start.
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
Did the Fed raise mortgage rates directly?
No. The Fed raised its short-term target range by a quarter point on September 16. Fixed mortgage rates follow the 10-year Treasury and mortgage-backed securities. They were already rising before the meeting, and the Fed’s move added to the pressure rather than setting the rate.
How many weeks in a row has Freddie Mac’s rate risen?
Freddie Mac’s survey for September 24 was the fifth straight weekly increase in the 30-year fixed average, which pushed it higher than it had been in recent weeks. Some coverage after September 17 said four, but that count is out of date.
Is an adjustable-rate mortgage a good idea now?
It depends on your holding period and your budget. The MBA said in its September 23 coverage that 5/1 ARM rates ran more than a percentage point below fixed rates, and ARM share rose to 9.8%. The saving is real, but the rate resets later. If you can absorb a higher payment after the reset, or you expect to sell before it, an ARM can fit. If not, fixed is safer.
Do HELOC rates go up when the Fed hikes?
Usually, yes. Most HELOCs float with a benchmark, so a Fed hike tends to raise them directly. I don’t have a sourced HELOC rate level to give you, so ask any lender for the index and margin before you open a line.
Is the Freddie Mac rate what I’ll pay?
Not necessarily. Freddie Mac’s survey covers conventional, conforming, fully amortizing loans for borrowers with excellent credit and a 20% down payment. Your own pricing depends on your credit, down payment, property and loan type. Use the survey as a market gauge, not a quote. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The October 13 NAR release will be the first read on whether buyers kept shopping through the hike or stepped back.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage broker with two platforms: DSCR investor lending across 41 markets, including Washington, D.C., and consumer mortgage programs in 16 states, all arranged through wholesale lending partners. This column is written by Lendmire’s founder and reflects the market as of its publication date; program terms and availability are set by the lender on each file. 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
3. Freddie Mac Primary Mortgage Market Survey
4. CNBC, Treasury yields, September 28, 2026
6. MBA Weekly Applications Survey, September 23, 2026
7. MBA’s survey
8. NAR existing-home sales report, August 2026
9. HousingWire
10. HousingWire, nonbank HELOC share and home equity, September 14, 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: Why A Local Real Estate Broker Matters As Buyers Gain Leverage, September 2026? · September 2026: Buyers Need A Real Estate Agent As Supply Grows, Rates Climb · Listing Your Home For Sale This Fall As Inventory Climbs And Rates Rise
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.