The Quick Read: As of September 28, 2026, homeowners hold more equity than ever, and the market that backs it is cooling. ICE’s August report put mortgage-holder equity at a record $18 trillion. NAR’s August report showed sales down and supply up. The Fed raised rates on September 16, and that reprices variable-rate debt like HELOCs while fixed first mortgages stay put.
Key Takeaways
- Equity is at a record, but ICE’s figures predate September’s rate spike. Treat them as a snapshot, not a forecast.
- Prices are still slightly positive. Sales volume is falling faster than prices.
- The Fed’s September 16 hike lifted prime, which reprices many variable-rate HELOCs. Fixed-rate first mortgages do not change.
- Spend selectively on upgrades. Draw on equity carefully, and only for something that pays for itself.
What Changed This Month
The Fed moved first. The Federal Reserve FOMC statement of September 16 shows a 12–0 vote to raise the target range by a quarter point, to 3.75% to 4.00%. It was the first increase since July 2023. In the dot plot, CNBC reported, 16 of 18 participants expect another hike.
Long-term rates jumped too. On September 23 the 10-year Treasury yield rose more than 13 basis points to 5.104%, CNBC reported, a level not seen since July 2007. Press accounts had it higher by week’s end. Exact closes differ by outlet, so I’ll stick with direction: it is at a multi-year high.
Mortgage rates followed. 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%. The AP reported it was the first weekly average above 7% since January 2025, after five straight weekly increases.
A note on definitions, because they matter. Freddie’s survey covers conventional, conforming purchase loans for borrowers with 20% down and excellent credit. It is not a benchmark for equity products or non-QM loans. Another published survey, for the week ending September 18, showed its 30-year contract rate moving higher from the prior week, and Mortgage News Daily’s index for top-tier 30-year loans sat noticeably above both surveys at the end of September. Three instruments, three different readings. Don’t blend them. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The Market Underneath: Sales Slow, Supply Builds
NAR’s report of September 10 showed August existing-home sales down 2.0% from July and down 1.2% from a year earlier, per HousingWire’s summary. The annual pace was 3.98 million, the first reading below 4 million since June 2025. Inventory rose to 1.62 million homes. Months of supply rose to 4.9. The median price still rose 1.6% to $429,100.
Existing-home sales have now posted three straight monthly declines, and the year-over-year figure has turned negative. NAR’s existing-home sales page quotes its chief economist: “Mortgage rates and home sales move in opposite directions.”
Buyers are pulling back. Redfin reported on September 17 that pending sales hit their lowest level in almost three years, though its median sale price was still up 2% from a year earlier. The MBA’s unadjusted purchase index for the week ending September 18 sat 11% below a year earlier. Refinance demand has mostly dried up: the MBA’s refinance index was 62% lower than a year ago.
Sellers face competition from builders. Census reported August new-home sales at a 684,000 annual rate on September 24, but the monthly gain wasn’t statistically significant. Inman reported that 38% of builders offered discounts in September and 66% used incentives.
Is supply at a record? Not exactly. NAR’s 4.9 months is described as a multi-year high. Realtor.com data, via Calculated Risk, still shows inventory about 11.1% below typical pre-pandemic levels. Both can be true. Supply is rebuilding from a very low base.
Record Equity, With a Timing Gap
Here is the paradox in the headline. ICE’s August Mortgage Monitor reported that mortgage-holder equity reached $18 trillion for the first time on record. It put tappable equity, the amount owners could borrow against and still keep a cushion, at $11.7 trillion across 47.5 million mortgage holders. Annual price growth was 1.5% in July.
Read that carefully. It’s a July snapshot, taken before the rate spike. ICE itself warned that price gains softened as rates rose, suggesting limited further acceleration in the second half. It also counted about 813,000 borrowers underwater, up 44% from a year earlier, mostly recent buyers and FHA and VA borrowers.
So equity is a real asset. It is also a moving number. It was built by years of appreciation, and appreciation is now thin.
What Does This Mean for Homeowners With Equity?
It means the cost of getting at that equity just changed, and it depends on the tool.
Most owners with a low fixed first mortgage are not moving. ICE’s June report noted that first-quarter second-lien lending was the strongest first-quarter volume in nearly two decades, because borrowers chose to keep their low first mortgages. That logic still holds. A second lien or line of credit lets you borrow without giving up the loan you already have.
But the pricing mechanics differ. A HELOC, a home equity line of credit, usually carries a variable rate tied to the prime rate plus a margin. Major banks raised prime after the Fed’s move, from 6.75% to 7%. Many variable-rate lines will reprice depending on their contracts. Your fixed first mortgage will not.
You can see how our HELOC programs work on the product page, which carries the current guidelines. Qualification is subject to lender guidelines, and I am not going to state figures here.
Here’s the common misreading. People hear “Fed hike” and assume their fixed mortgage rate went up. It didn’t. The Fed doesn’t set fixed mortgage rates. It reprices prime-linked products directly. Fixed rates track the 10-year yield, which was already climbing.
I’m also deliberately skipping HELOC “average rate” surveys. Their definitions conflict, and I’d rather explain the mechanism than hand you a number that won’t match your contract.
My Take
Prices are not collapsing. Volume is. That’s a different problem, and it’s the one that matters for your equity.
NAR’s median price is still up. Redfin says sellers are not in immediate danger of home values dropping. But the listing side tells a softer story: Realtor.com’s weekly data showed median listing prices down 1.3% and active inventory up 5.8% from a year earlier, per WRE News. Those are asking prices, not closed sales, so they lead the closed-sale data.
Price-cut numbers are all over the place. HousingWire counted 42.1% of active listings with cuts. Realtor.com’s August share was 20.4%. One measures a stock of listings, the other a monthly flow. Half of homes do not have cuts in the way a headline might suggest.
My read: a fresh coat of paint helps a listing photograph, but it isn’t what protects your value now. It won’t offset a buyer pool squeezed by seven-percent money. I haven’t researched renovation returns for this column, so I won’t hand you a payback claim. What I can say is that market conditions, not a weekend of upgrades, are doing most of the work on your value this fall.
That cuts both ways. A weak buyer pool means less upside if you list this month. It also means the equity on paper may take longer to turn into cash.
What I’d Do Now
Spend selectively on upgrades. Fix what a buyer or an appraiser will flag: roof, HVAC, water intrusion, deferred maintenance. Skip the discretionary projects that only pay back if prices rise. Builders are discounting, and that competes directly with resale homes.
Draw on equity carefully. Borrow for something that pays for itself or that you truly need. Don’t borrow against a July snapshot on the assumption that prices keep climbing. ICE expects gains to soften.
Understand your rate structure before you draw. If your line floats with prime, ask what happens after another hike. The dot plot suggests more may come. CME FedWatch put the odds of an October hike near 64% as of September 26, per CNBC. The next FOMC meeting is October 27–28.
Know how locks work if you’re doing a fixed product. A rate lock holds a quoted rate for a set period, so a move in the market doesn’t change your terms. Quotes gathered on different days are not comparable, because the market moved in between. If a fixed structure fits your plan and you like the terms, lock it. Floating a rate in a market that has risen for five straight weeks is a bet, not a plan.
Keep a cushion. If you’re thinking about using home equity to buy other property, read the guide “Using Home Equity to Buy a Rental” before you commit. The numbers have to work without appreciation.
Don’t wait for a perfect signal. I honestly don’t know whether this is a bond-market spike that fades or a new level. I found no sourced forecast beyond the Fed’s dot plot. Plan for rates staying where they are and treat any drop as a bonus.
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
Did the Fed’s September hike raise my fixed mortgage rate?
No. A fixed-rate mortgage stays the same for the life of the loan. The September 16 hike reprices prime-linked products such as many HELOCs, depending on your contract. New fixed-rate loans track longer-term yields, which had already been rising.
Is my home worth less than it was this summer?
Probably not by much, but the direction is flatter. NAR’s August median price rose 1.6% from a year earlier, and ICE’s July annual growth was 1.5%. Sales volume is what has dropped. Your own value depends on your local comparable sales, so check recent closed sales near you rather than a national headline.
Does record equity mean I can safely borrow against it?
Not automatically. ICE’s $18 trillion figure is a July snapshot that predates the rate spike, and ICE expects price gains to slow. It also counted about 813,000 underwater borrowers. Borrow against equity only for a purpose that justifies the debt, and keep a cushion. Eligibility is subject to lender guidelines.
Is a HELOC still worth considering when rates are rising?
It can be, for the right purpose. A line lets you keep a low first mortgage and borrow only what you need. The tradeoff is that a variable rate can move up after each Fed hike. Weigh it against a fixed-rate second lien, and read the HELOC page for the current program details.
Should I sell now or wait?
That depends on your goals, not on a national headline. Buyers have more inventory and builders are discounting, so sellers face more competition than a year ago. Realtor.com’s data put the seasonal buying window at September 27 through October 3, with list prices about 3.5% below the peak. That favors buyers. If you don’t need to sell, you have room to wait.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire arranges DSCR investor loans in 40 states plus Washington, D.C. — 41 markets — and, on its consumer platform, bank statement, home equity and down payment assistance financing in 16 states, through wholesale lenders. Lendmire never underwrites or funds a loan itself. 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
3. CNBC, Treasury yields and Fed odds, September 23, 2026
4. Freddie Mac Primary Mortgage Market Survey
5. HousingWire, August existing-home sales
7. Inman, August new-home sales
8. WRE News
9. CNBC
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: Maximizing Your Home’s Curb Appeal: 6 Top Tips for Sellers · Sell Your Home Faster: 7 Staging Techniques for Every Seller · Transform Your Home This Spring: Simple Yet Effective Refresh Ideas
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.