The Quick Read: the 30-year fixed climbed to 7.03% for the week of September 24, 2026, per Freddie Mac’s PMMS release, a three-week run of 32 basis points that pushed rates above 7% for the first time since May 2025. The Fed raised its target rate on September 16, 2026, its first hike since 2023, and signaled more tightening ahead. None of that touches the structural math behind a VA loan. It changes the urgency around locking one in.
What Changed This Month
Rates didn’t drift higher in September. They climbed in a straight line, week after week, and that pattern matters more than any single number.
Freddie Mac’s survey shows the 30-year fixed averaging 6.71% for the week of September 3, 2026, then 6.76% the week of September 10, then 6.95% the week of September 17, then 7.03% for the week of September 24 — a full 32 basis points in three weeks, according to Freddie Mac’s PMMS release. A year earlier, the same survey put the 30-year fixed at 6.30%. That’s a 73-basis-point jump year over year.
The Mortgage Bankers Association’s weekly survey confirms the milestone. For the week ending September 11, 2026, MBA’s Joel Kan noted the 30-year fixed rate hit its highest level since May 2025, with the 10-year Treasury inching toward 5%. A week later, MBA data showed the rate had pushed to 7.12%, with applications falling 1.5%.
The driver is the Federal Reserve. On September 16, 2026, the FOMC raised its target range by a quarter point to 3.75%–4%, its first increase since 2023. Fed Chair Kevin Warsh said inflation has run “too high for too long” and that the committee needed more confidence before easing again. Markets are now pricing in another quarter-point hike in December, with more tightening possibly extending into 2027.
The 10-year Treasury yield, which drives long-term mortgage pricing more than the Fed funds rate does directly, sits near 5.17% as of September 25, 2026, per Trading Economics — up sharply after a three-session sell-off tied to energy prices and inflation concerns. That yield has risen about a full percentage point since its February low.
Meanwhile, existing-home sales fell 2% in August to a seasonally adjusted pace of 3.98 million units, according to NAR’s report. Inventory rose to 1.62 million units, the first time since November 2019 that supply crossed that mark, pushing months of supply to 4.9 — the highest reading in over a decade. The median price still rose 1.6% to $429,100. Rates went up. Prices didn’t come down. That combination is the whole story for anyone budgeting a purchase this fall.
Key Takeaways
- The 30-year fixed rose 32 basis points in three weeks, crossing 7% for the first time since May 2025, per Freddie Mac and MBA data.
- The Fed hiked rates on September 16, 2026, its first increase since 2023, with more tightening possibly ahead.
- VA loan applications gained share (12.0% to 12.4%) even as total mortgage applications fell 4.1% the same week.
- Inventory hit its highest level since 2019, giving buyers more negotiating room even as rates rise.
- Refinance activity is down 65% year over year — most owners with low rates are staying put. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
What It Means for Home Buyers
Higher rates hit every buyer’s monthly budget, but not every buyer equally. A VA loan’s structure — no down payment, no monthly mortgage insurance — becomes a bigger relative advantage exactly when rates rise, because it removes two of the three biggest cost variables in the payment.
Here’s the plain-language version. When rates move up even modestly, the difference doesn’t sound like much month to month. On a 30-year term, though, that gap compounds into real money over the life of the loan. Add private mortgage insurance, which conventional buyers typically carry until they build enough equity, and the total monthly gap widens further. VA borrowers skip that line item entirely, subject to program eligibility and lender guidelines.
The data backs up that buyers eligible for VA financing are leaning into it harder as rates rise, not backing away. MBA’s survey for the week ending September 11 showed the VA share of total applications rose to 12.4% from 12.0% the prior week — even as overall application volume fell 4.1%. FHA’s share moved the other direction, down to 16.9% from 17.2%. That’s a meaningful divergence: one government-backed program gaining ground, another losing it, in the same week, under the same rate pressure.
Refinance activity paints a different picture. The Refinance Index fell 9% week over week and sits 65% below where it was a year ago, per the same MBA release. Owners who locked in lower rates over the past few years have no incentive to refinance into today’s market. That’s not a surprise. It does mean most of the current mortgage activity is coming from people who have to move — job relocations, growing families, life events — not people chasing a better deal.
Is the VA Rate Advantage Still Worth It at 7%?
Yes — the structural savings from skipping a down payment and mortgage insurance don’t shrink when rates rise; they matter more, because the base payment itself is already higher. A rate gap that felt marginal when rates were lower becomes a bigger dollar swing as the overall rate level climbs.
Think of it this way: a fixed percentage-point advantage, whatever it happens to be on a given day, translates into a larger monthly dollar gap as the overall rate level rises. That’s just arithmetic. The same principle applies to skipping mortgage insurance — a flat monthly cost on a conventional loan doesn’t get smaller because rates went up elsewhere. If anything, a buyer stretching to qualify at today’s higher rates benefits more from removing that line item, not less.
None of this means every VA-eligible buyer should rush a purchase before rates move again. It means the case for using the benefit, when available, gets stronger as the overall rate environment gets more expensive — not weaker. Details on how VA and other government-backed programs stack up, including current guidelines, live on Lendmire’s loan options page.
My Take
I think the September rate move gets misread by a lot of buyers as a signal to wait. My opinion: waiting for a specific rate to reappear is a bad plan when the Fed itself says it isn’t finished tightening.
The Fed’s own language on September 16 was blunt — inflation has run too high for too long, and the committee isn’t confident yet that it’s cooling fast enough. Markets are pricing another quarter-point hike in December. That’s not a guarantee rates keep climbing in a straight line; the Fed’s own dot plot showed real disagreement among officials about 2027, with some seeing another hike, some seeing steady rates, and some seeing cuts. But it tells me the base case isn’t “rates snap back down soon.” It’s “this is roughly where things sit for a while.”
Here’s what strikes me most: VA applicants didn’t pull back as rates moved higher this year. Their share of total applications went up. FHA borrowers moved the other way. That’s not proof VA is immune to rate pressure — nobody is. It suggests borrowers using the VA benefit have less reason to sit on the sidelines, because the parts of the deal that matter most to their monthly budget — no down payment, no PMI — don’t erode the way a rate advantage alone might.
What I’d Do Now
If you’re VA-eligible and shopping, get pre-approved now and understand exactly when you can lock. A rate lock fixes your rate for a set window while you shop or close; floating means you’re exposed to whatever the market does next, up or down. In a rising-rate month like this one, locking once you’re under contract is the lower-risk move for most buyers, though it’s a personal call tied to your closing timeline and risk tolerance.
If you’re comparing quotes from different days, treat them as separate data points, not apples to apples — rates moved multiple times a week through September, and a quote from three weeks ago tells you almost nothing about what’s available today.
If you’re an existing homeowner who locked in favorable terms in the past, the data supports staying put rather than chasing a refinance. Refinance volume is down substantially year over year for a reason — most people who could benefit from refinancing already did so previously. That said, cash-out and rate-and-term refinances still make sense in specific situations tied to your goals, not the broader rate environment; the tradeoffs between those two paths are worth understanding, especially if you’re weighing that decision after a major income change. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
If you’re not sure whether the VA benefit or another loan option fits your situation better this fall, that’s a conversation worth having before you shop for a house, not after you find one. If you’re weighing a purchase or a refinance in this rate environment, Lendmire can walk you through how current loan options fit your file — call 828-256-2183 or request a quote through Lendmire’s mortgage quote form.
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 a 7% mortgage rate high by historical standards?
It’s the highest level since May 2025, per MBA’s Joel Kan, but it’s not unprecedented over a longer horizon. What matters more for your decision is the trend, not the historical comparison — and the trend through September has been consistently upward.
Should I wait for rates to drop before buying?
That depends on your timeline and how much certainty you need. The Fed has signaled it may raise rates again in December, and its own officials are split on where things head in 2027 — waiting for a specific number to reappear isn’t a strategy with a defined endpoint.
Does a VA loan still make sense if rates keep rising?
The core structural benefits — no down payment, no monthly mortgage insurance — don’t depend on where rates sit. If anything, those savings represent a larger share of your monthly payment as overall rates climb, subject to lender guidelines and program eligibility.
Why did VA loan applications go up while overall applications fell?
MBA’s data for the week ending September 11 showed VA’s application share rising to 12.4% from 12.0%, even as total applications dropped 4.1%. That divergence suggests VA-eligible borrowers had less reason to pull back than the broader market.
Is now a bad time to refinance?
For most owners with a rate locked in over the past few years, yes — refinance activity is down 65% year over year because there’s little incentive to trade a lower rate for a higher one. Refinancing can still make sense for specific goals like consolidating debt or tapping equity; the math there depends on your situation, not the headline price.
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. Freddie Mac PMMS Release — Mortgage Rates Average 7.03%
2. NAR Existing-Home Sales Statistics
3. MBA Weekly Applications Survey, September 16, 2026
4. 2025
5. 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: Home Benefits for Veterans · How to save for a down payment · Top 5 Most Common Mortgage Types
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.