The Quick Read: Supply of existing homes hit 4.9 months in August, per NAR’s report of September 10, 2026, and builders are still cutting prices. That gives appraisers more recent, softer comparable sales to work from. If you’re buying a rental, build the checklist around current closed comps and the rent schedule. Contracts priced on last spring’s market are the ones at risk of coming in short.
This column is written as of September 28, 2026. Every number below carries its source and date. Some of it is a mixed signal, and I’ll flag where.
Key Takeaways
- NAR’s August report (released September 10) showed inventory of 1.62 million homes and 4.9 months of supply, the highest in over ten years by NAR’s own description.
- Builders are discounting: 38% cut prices in September, and 66% used incentives, per the NAHB survey as reported by Inman on September 25.
- The 30-year fixed rose over the four weeks through September 24 in Freddie Mac’s survey, so the rate environment is less forgiving than it was in early September.
- I found no September data showing a rise in low appraisals. The risk is a reasoned inference, not a measured trend.
- Price your offer off recent closed sales and the rent. Move forward on financing when you like the numbers.
What Changed
Inventory built. NAR’s August existing-home sales report, dated September 10, 2026, put sales at a 3.98 million annual rate, down 2.0% on the month. Inventory reached 1.62 million, up 5.9% from August 2025. Supply stood at 4.9 months, up from 4.6 in July and 4.6 a year earlier. NAR’s economist called that the highest in over ten years.
Prices haven’t cracked. The median existing-home price was $429,100, up 1.6% from a year earlier, the 38th straight month of annual gains. But that is a national, all-types median. It says nothing about the street your rental sits on.
Builders kept discounting. Census data released September 24 showed new-home sales at a 684,000 annual rate. The Census Bureau put the median new-home price at $393,700, down 5.8% from a year earlier, with 8.5 months of supply. Census flags the median-price change as not statistically significant, so don’t over-read it. Mix shift toward smaller, cheaper homes may explain part of it.
The builder survey is clearer. Inman’s September 25 report on the NAHB survey said 38% of builders cut prices in September, up from 35% in August. Some 66% used incentives, the highest share since December. The average cut held at 6%.
Listing prices are sliding. For the week ending September 19, Realtor.com data, as summarized by WRE News on September 24, showed active inventory up 5.8% from a year earlier. The median list price was $419,500, down 1.3%, the 36th straight weekly annual decline.
Money got more expensive. 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 four September prints climbed from 6.71% on the 3rd to 7.03% on the 24th. Mortgage News Daily’s index closed at 7.43% on September 25.
The Fed added pressure. On September 16 the FOMC voted 12–0 to raise the target range by a quarter point, to 3-3/4 to 4 percent. The statement says inflation remains elevated. CNBC reported on September 28 that the 10-year Treasury hit its highest level since June 2007 on September 24 before easing, then rose again Monday.
One caution. Freddie Mac’s survey covers conventional, conforming purchase loans for borrowers with excellent credit and 20% down. It is a benchmark, not an investor quote. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Why Would an Appraisal Come in Short Now?
An appraisal comes in short when the appraiser’s supported value lands below the contract price. Appraisers lean on nearby closed sales, and those sales now reflect a market with more supply, more price cuts and more expensive money. A contract signed in the spring can look stale by the time the report lands.
Here’s the catch on the evidence. HousingWire reported on April 13 that appraisals in 2026 were more often coming in above contract than below it. That was spring, before this inventory build. I found no September data showing low appraisals rising. So this is my read of how the mechanics should work, not a measured trend.
The logic is simple. Comps are backward-looking. When inventory rises and sellers cut, the newest closed sales are the weakest ones. They carry the most weight in the report. The median price can keep printing year-over-year gains while the comps on your block slip. NAR’s median is a lagging, mix-affected number. The appraiser does not use it.
What It Means for Real Estate Investors
Investors feel this harder than owner-occupants, for three reasons.
First, financing costs rose while comps softened. That squeezes both sides of the deal at once: a lower appraised value and a more expensive loan.
Second, NAR says buyers now have better opportunities to negotiate. The same report says sales fell in the Northeast, Midwest and South and were flat in the West. A price agreed in a hotter month is a negotiating chip you may not need to honor in full.
Third, an investment property is judged on more than comps. DSCR loan programs qualify primarily on the property’s rental income rather than personal income, subject to lender guidelines. That puts the rent schedule in the file next to the appraisal. If you’re weighing DSCR loan programs, the product page carries the current guidelines. I won’t put figures in a column.
Non-QM is still a growing corner of the market. Industry forecasts cited by the trade press in July put 2026 originations near $175 billion, with investor loans expected to be about half of the collateral. That is background, not September volume data. I found no fresh, verifiable September figures from a primary source. A National Mortgage News opinion piece in June warned credit concern could return to DSCR as yields rise. Take it as a caution, not a call.
The Checklist
Build it in this order. Each item is something you can do before you’re committed.
1. Pull your own comps first. Look at closed sales near the property, not active listings. List prices are falling, and sale prices lag list prices. The closed sales tell you what buyers actually paid.
2. Sort comps by date. Weight the most recent ones. A comp from last spring is not evidence of today’s value.
3. Compare like with like. Match size, condition, unit count and location. One stale or mismatched comp in a thin area can drag a report.
4. Check the price trend on the street, not the nation. National medians mislead. Ask the agent how many nearby homes had price reductions.
5. Get the rent schedule in writing. Current leases, or a market rent analysis if vacant. Lenders reviewing an investor file look at rental income, so have it ready.
6. Stack the incentives. If a builder is offering buydowns or credits, ask what the contract price would be without them. Incentives can prop up a headline price.
7. Read your appraisal contingency. Know what happens if the value comes in short: renegotiate, cover the gap, or walk. Decide before you need to.
8. Keep the repair and improvement records. Permits, receipts and dates support condition and upgrades. They don’t override weak comps.
9. Ask about a second opinion on value. If the report is short and you have better comps, a reconsideration request with specific closed sales is a normal step.
Two of these deserve a second look. The incentive point matters because 66% of builders used incentives in September. A published report of September 24 says builders have spent 2026 adjusting prices, buying down mortgage rates and shifting toward lower price points. A builder’s sticker can hide concessions that an appraiser treats differently. Ask for the full picture.
The rent schedule matters because it is the part of the file you control.
My Take
I don’t think this is a crash, and I’d push back on anyone who says it is. Census says the median new-home price change wasn’t statistically significant. New-home supply at 8.5 months is unchanged from a year ago. Realtor.com says active listings are still about 11% below pre-pandemic levels. More inventory doesn’t mean the shortage is over.
But the direction matters more than the headline. Inventory is up, list prices are down, builders are cutting, and the cost of money rose 32 basis points in four weeks. The buyers who get hurt are the ones holding a contract priced on a market that no longer exists.
Thinking out loud here: the honest uncertainty is timing. Sale prices lag list prices. If list prices keep falling, closed-sale comps follow months later. So the appraisal risk may be bigger in the fall and winter than it is today. That’s a guess, and the next NAR release on October 13 will tell us more.
My view on rates is narrower. The Fed hiked, the 10-year hit a multi-year high, and markets lean toward another hike on October 28, though the September 30 PCE report and October 2 jobs data are still ahead. I can’t tell you where rates go. I can tell you that the gap between a loan you lock and a loan you float has been widening in one direction this month.
What I’d Do Now
None of this is advice to buy or sell a particular property. It’s how I’d run the process.
Re-price the deal, not the hope. If your contract was written in the spring, run it again on current closed comps. If it still works, good. If it only works at the old price, you have a negotiation, not a problem to absorb.
Keep the appraisal contingency. In a market where NAR says buyers have more room to negotiate, giving up protection to win a deal is the wrong trade.
Build the rent case early. Gather leases, rent rolls or a market rent opinion before the appraisal is ordered. On an investor loan the rental income sits in the file alongside the value.
Lock when you like the numbers. A rate lock is an agreement that holds a quoted rate for a set period while your file moves forward. Floating means you haven’t locked and accept the market’s moves. Four weekly prints in September went up every week. If the deal works at today’s market, I’d lock it. Waiting for a better print has been expensive this month.
Compare quotes from the same day. A quote gathered on September 10 and one gathered on September 24 are not comparable. The market moved in between. Line them up by date or they tell you nothing.
Plan for a gap. Decide in advance how much of a shortfall you’d cover, if any, and what you’d do if the gap is larger. Don’t decide that at the closing table.
The business-owner and equity-rich borrowers I hear from often ask about documentation for second homes. If that’s you, these two pieces lay out the paperwork side: using business cash as reserves on a second home and a Lendmire checklist of the documentation that asset-rich borrowers need. Both are about second homes, not rentals, so read them for the documentation logic.
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
Are appraisals coming in below contract price right now?
I can’t show that from September data. HousingWire reported on April 13, 2026 that appraisals were more often at or above contract. Since then, inventory has built and list prices have fallen, so the risk should be rising. But I found no measurement of it yet.
Does a rising national median price mean my appraisal is safe?
No. NAR’s median rose 1.6% from a year earlier as of the September 10 report, but it is a national, all-types figure that lags the market. An appraiser uses nearby closed sales. Your block can soften while the national number still rises.
Is 7.03% the rate an investor would pay?
No. Freddie Mac’s survey for the week of September 24 covers conventional, conforming purchase loans for borrowers with 20% down and excellent credit. Investor and DSCR loans are priced separately, and I won’t quote them in a column. Treat the survey as a market direction gauge. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Should I lock my rate now or wait?
If the deal works at today’s market, lock it. The 30-year averaged 6.71% on September 3 and 7.03% on September 24 in Freddie Mac’s survey. Floating is a bet on direction, and this month the direction has been up. Nobody can promise October.
Are new-home discounts a sign of a national price drop?
Not by themselves. Census flagged the median new-home price change as not statistically significant, and supply of 8.5 months matches a year ago. Builders are cutting, though: 38% in September per the NAHB survey. It’s a pressure signal, not a collapse.
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. NAR August existing-home sales report
2. Census Bureau new residential sales
3. Inman on NAHB builder survey
4. WRE News
5. Freddie Mac Primary Mortgage Market Survey
6. HousingWire on the 2026 appraisal gap
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.