The Quick Read: As of September 28, 2026, borrowing costs are climbing and buyers have more room to negotiate. Freddie Mac’s survey has risen four straight weekly readings, and the Fed raised its target range on September 16. For a buyer with little saved, a government-backed rural program may be worth checking before you settle on a plan. Whether it fits depends on the property’s location, your household income and the lender’s guidelines.
I’ve been in lending for eighteen years. The pattern is familiar. Rates rise, buyers stall, and the people with the thinnest savings assume the door has closed. Sometimes it has. Sometimes a different program is still open to them.
Key Takeaways
- Freddie Mac’s 30-year average hit 7.03% for the week of September 24, 2026, up from 6.30% a year earlier.
- Purchase applications were 11% below a year ago in the MBA’s survey for the week ending September 18.
- August existing-home sales slowed, and months of supply rose to 4.9, per NAR’s report of September 10. That gives buyers more leverage.
- Freddie’s number does not measure USDA pricing. Ask for real quotes on the same day.
- A low-down-payment program only helps if the property and your income fit it. Check that first.
What Changed This Month
The rate climb is steady, and it is documented. Freddie Mac’s survey put the 30-year fixed at 7.03% for the week of September 24, 2026. The prior week it was 6.95%. A year ago it was 6.30%. That is 73 basis points higher. (A basis point is one hundredth of a percentage point.)
The path matters more than any single print. Freddie’s September 3 release showed 6.71%, up from 6.66%. Then came 6.76%, then 6.95%, then 7.03%. Four straight weekly gains. The biggest step was 19 basis points in the week of September 17.
The Fed added pressure. On September 16, the FOMC voted 12-0 to raise its target range by 25 basis points, to 3-3/4 to 4 percent, per the Federal Reserve’s implementation note. It was the first hike since 2023.
One correction to a common belief. The Fed does not set mortgage rates. Mortgage rates follow the bond market, and the market had been pricing in the hike. Still, the direction is clear.
Demand is reacting. The MBA’s weekly survey, released September 23, covered the week ending September 18. Its Purchase Index fell 1% from the prior week and sat 11% below the same week a year earlier. The MBA put its own 30-year reading at 7.12%, the highest since May 2024. Refinance applications were 62% below a year ago. ARM share rose to 9.8%.
A caution on that 11%. The prior week included a Labor Day adjustment, so year-over-year comparisons are noisy. The direction is not in doubt, though. Purchase demand ran 20%-plus above a year earlier in late April, per Freddie’s commentary. It has swung to weakness as rates rose.
Is the Housing Market Giving Buyers More Room?
Yes, modestly. Sellers are facing a slower market, and buyers can ask for more.
NAR’s August report, released September 10, showed existing-home sales down 2.0% from July. The seasonally adjusted annual pace was 3.98 million. That was the first reading below 4.0 million since June 2025. Inventory reached 1.62 million homes, up 5.9% from a year earlier.
Months of supply rose to 4.9, up from 4.6 a year earlier. Months of supply is how long the current inventory would last at the current sales pace. NAR’s chief economist called it the highest in over ten years. He said it gives buyers better chances to negotiate.
Don’t read this as a price collapse. The median existing-home price was $429,100, up 1.6% from a year earlier. More supply means more choice and more leverage. It does not mean falling prices.
New construction tells a similar story. Census data for August, released around September 24, put new-home months’ supply at 8.5. The monthly sales rise carried a wide margin of error, so I wouldn’t lean on it.
What Does This Mean for Buyers With Little Saved?
The squeeze is real. A higher rate raises the monthly cost of every loan. A buyer with little saved borrows more to begin with, so the higher rate hits harder.
Here is a plain hypothetical. If a rate moves from 6.30% to 7.03%, that is 73 basis points on the whole balance, every month, for the life of the loan. The bigger the balance, the bigger the effect. A low-down-payment buyer feels that more than a buyer with a large down payment.
There is an offsetting factor. Sellers are giving more room, and that room can be worth real money at the table. A seller credit or a price cut can offset part of a higher rate. A rate can be refinanced later if the market improves. A purchase price cannot.
This is where low-down-payment options come into the picture. Some buyers look at programs designed for eligible rural areas, which are offered through approved lenders. Per the program’s own materials, these options can include financing with no money-down feature, and the program says it does not endorse any specific lender and encourages comparison shopping. I agree with that advice. For investors, a DSCR loan is a different path: it qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
You can see our loan options page for the current guidelines on this and other low-down-payment programs. I’m not repeating figures here because guidelines change, and that page is the source of truth.
Who Should Look at a USDA Loan?
Three conditions decide it. All three must line up.
The property has to be in an eligible area. The program covers eligible rural areas, not the whole map. “Rural” is broader than many buyers expect, and some suburban-feeling areas qualify. Others that feel small-town do not. Check the address, not the vibe.
Household income has to fit. The program is built for moderate-income households, and limits vary by location and household. Buyers sometimes assume they earn too much or too little without checking, so confirm where your household falls before ruling the program in or out.
The home is for you to live in. This is not an investor product. It is a primary residence program. A rental, a vacation home or a farm operation is a different conversation.
If all three fit, the program can be a real alternative to saving for a bigger down payment. If one doesn’t, move on quickly to the next option rather than forcing it.
Loans backed by a single federal program are a small slice of the market. The MBA’s July 1 release put USDA at 0.4% of applications in the week ending June 26. That share is small, and it tells me many buyers never check. It doesn’t tell me the program is hard to use.
What About the New USDA Pilot?
USDA Rural Development began a pilot called Delegated Authority LITE on September 1, 2026, per its announcement. Selected lenders can close USDA loans with less agency pre-closing involvement. The Federal Register notice says the pilot runs two years, ending September 28, 2028.
I’d be careful here. It is a pilot with a limited set of participating lenders. I found no data yet on what it changes for borrowers. Treat it as a program-administration story, not a reason to act.
There are also two proposed USDA rules I’d watch. One concerns income-producing accessory dwelling units. The other concerns how real estate commission fees count toward interested-party limits. Comment periods have closed. I haven’t confirmed whether either is final, so don’t plan around them.
My Take
Here is my opinion, stated as one. The rate climb is a real headwind, but it is not the main story for a buyer with little saved. The main story is that the buyer needs to know which programs are open to them before the search starts.
A rate move of this size makes the program choice matter more. When rates are low, a poor program match hides inside a manageable payment. At 7% it doesn’t hide. Every choice costs more.
I also think Freddie’s number gets misread. Its survey describes conventional borrowers with large down payments and strong credit, per Freddie’s own release pages. It is a benchmark for the direction of the market. It is not a price list, and it says nothing specific about USDA loans. I found no official source for USDA-specific rate levels. Anyone who quotes you one from a headline is guessing.
The buyers waiting for a return to the lows of early 2026 may wait a long time. Freddie’s average touched 6.01% on February 19, per its release, the lowest since September 2022. The market has moved 102 basis points since. Plenty of forecasts call for more rises, but a forecast is not a fact. The dot plot points to another Fed move this year, and that is a projection.
If you want more on how a streak like this plays out, I wrote about three consecutive weekly rate rises earlier. The streak is longer now.
What I’d Do Now
This is process advice, not a call on whether to buy.
Check eligibility before anything else. Start with the address and household income. If either fails, you’ve saved yourself a wasted search.
Get several quotes on the same day. Rates move daily. A quote from Tuesday and a quote from Friday can’t be compared. If the market moved between them, you are comparing the market, not the lenders. Collect quotes in a single sitting.
Compare more than the rate. USDA itself says to comparison shop. Ask how each option treats mortgage insurance or guarantee costs, and compare them side by side. A program with a low down payment can cost more or less over the long run than one that asks for more up front. The answer depends on the file.
Know how a lock works. A rate lock holds a quoted rate for a set period so a market move doesn’t change it. Floating means you haven’t locked and the rate can go either way. In a market climbing for four straight readings, floating is a bet. If you like a deal and the numbers work, lock it. That’s a rule of thumb, not a promise about where rates go.
Use the extra room. With months of supply at 4.9, ask for what the market will give. A seller credit toward closing costs can matter more to a low-savings buyer than a small price cut. Your agent can tell you what is reasonable locally. I can’t, and this column isn’t local.
Keep a refinance in mind. Refinance applications are down 62% from a year ago. That tells you how few people can refinance today. If rates fall later, the option exists, subject to lender guidelines and your file at that time. Don’t buy on the assumption that it will.
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 use the quote request.
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
Does Freddie Mac’s 7.03% apply to a USDA loan?
No. Freddie’s survey covers conventional loans for borrowers with large down payments and strong credit, per its own release pages. It shows where the market is heading. USDA pricing is set separately through approved lenders, and I found no official source for USDA-specific rate levels. Get real quotes.
Is the rate climb a reason to skip buying this year?
That depends on your finances, not on the headline. Rates are higher than a year ago, and purchase applications are down. But sellers have more room to negotiate, and the option to refinance later stays open, subject to lender guidelines. I can’t tell you to buy or wait. I can tell you to check your options before deciding.
Who is eligible for a USDA loan?
Eligibility turns on three things: the property’s location in an eligible area, household income, and owner-occupancy. Exact limits vary by location and by household, and they change. The loan options page carries the current guidelines. The lender’s review decides the rest.
Can I use a USDA loan for an investment property or vacation home?
No. It is a primary-residence program for eligible rural areas. If you want a rental, that is a different loan type entirely, and lenders review those on the property’s income and other guidelines.
Should I lock my rate now?
A lock protects you from a rise after you lock. It does not guarantee a better outcome than floating would have delivered. With the 30-year average up four straight weekly readings, many buyers prefer the certainty. If the payment works for you at today’s quote, locking removes one risk. Talk it through with your loan officer before you decide.
About Lendmire
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
1. Freddie Mac Primary Mortgage Market Survey
2. Federal Reserve implementation note, September 16, 2026
3. MBA Weekly Applications Survey, September 23, 2026
4. NAR existing-home sales report for August, September 10, 2026
5. Freddie Mac release, February 19, 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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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.