The Quick Read: As of September 28, 2026, the 30-year rate has climbed four weeks running and the Fed has raised rates for the first time since 2023. Buyers are pulling back on conventional purchases, and investor and DSCR loans now make up a bigger slice of non-QM production than at any point in the data I can cite. A DSCR loan is reviewed on the rental income of the property, not the borrower’s paycheck. That is why it keeps showing up when rates rise.
Key Takeaways
- Freddie Mac’s survey put the 30-year fixed at 7.03% for the week of September 24, 2026, the first reading above 7% in 20 months, per NPR.
- The Fed raised its target range a quarter point on September 16, 2026. It was the first hike since 2023.
- Optimal Blue data show investor and DSCR loans at over 35% of non-QM production in August 2026. That is a share of non-QM only, not of all mortgages.
- Higher rates hit the rent-covers-the-payment test directly. Run the test before you fall for a deal, not after.
What Changed: Four Weeks Up, One Fed Hike
Mortgage rates have risen four straight weeks, and the pace picked up mid-month. Freddie Mac’s 30-year average was 6.71% on September 3, up 5 basis points from the week before. It hit 6.95% on September 17, a 19 basis point jump from the prior week. Then it reached 7.03% for the week of September 24. That is 37 basis points above the 6.66% reading of August 27, by my arithmetic from those releases. A year earlier the same survey showed 6.30%.
A basis point is one hundredth of a percentage point. So 37 of them is a bit over a third of a point. Not small.
Now the scope caveat, because it matters for this column. Freddie Mac’s survey covers conventional, conforming, fully amortizing purchase loans for borrowers with 20% down and excellent credit. It does not measure non-QM or DSCR pricing. Anyone telling you that 7.03% is what an investor pays is reading the wrong gauge. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Other gauges run higher. The MBA’s weekly survey put its 30-year contract rate at 7.12% for the week ending September 18, up from 6.97%, per its September 23 release. Same market, different method. Name the source every time.
The Fed moved too. In its September 16, 2026 statement, the FOMC raised the target range a quarter point to 3-3/4 to 4 percent by a 12–0 vote. Kiplinger noted it was the first hike since 2023. CNBC reported that officials are split on 2027: eight pointed to another hike, six to no change and four to cuts.
One misreading to clear up. The Fed does not set mortgage rates. The NAA’s commentary on Freddie Mac’s report made the point that the policy rate does not control long-dated mortgage costs. The MBA ties the climb to the 10-year Treasury, energy prices, inflation and federal debt, and its chart of the week on September 24 put the 10-year close to 5.2%. The Fed hike is part of the story, not the whole of it.
How Are Buyers Responding?
Buyers are stepping back. The MBA’s September 23 release showed total applications down 1.5% for the week ending September 18. The seasonally adjusted Purchase Index fell 1%, and the unadjusted index sat 11% below a year earlier. The Refinance Index was 62% below a year ago. Refinancing is close to dead at these levels.
Some borrowers are shifting structure instead of walking away. The MBA’s newslink summary put the adjustable-rate share of applications at 9.8% for the week ending September 18. It was 8.4% the week before, per the September 16 release. Don’t overread that. Under 10% is still a small minority.
The housing data shows a market with more supply and a stalled pace. NAR’s report on August existing-home sales, released September 10, 2026, showed sales down 2.0% from July and 1.2% from a year earlier. Supply stood at 4.9 months, up from 4.6 in July. The median price was $429,100, up 1.6% from a year earlier, the 38th straight annual gain. Rising rates have not meant falling prices so far. That is a common misreading, and the data doesn’t support it.
New homes tell a mixed story. Census reported on September 24 that August new-home sales ran at 684,000, up 6.4% from July and down 2.0% from a year earlier. Inman noted Census did not consider the monthly change statistically significant. The same report cited the NAHB Housing Market Index: 38% of builders cut prices in September and 66% used incentives. Builders are working to move inventory.
Why Is DSCR Crowding In?
DSCR is gaining share because it answers a different question than a conventional loan does. A conventional loan asks whether the borrower’s income supports the debt. A DSCR loan, available through DSCR loan programs arranged by a broker like us, asks whether the property’s rent covers its own carrying costs. DSCR stands for debt service coverage ratio. You divide the monthly rent by the monthly debt service, which covers principal, interest, taxes, insurance and any HOA dues. Eligibility depends on lender guidelines, credit profile and property review, and the product page carries the current terms.
Now the numbers. Stacker’s September 28 analysis, citing Optimal Blue’s August data, put investor and DSCR loans above 35% of non-QM production, with bank-statement loans near 30%. That same analysis had the DSCR and investor share at 29% in July 2025. HousingWire, also citing Optimal Blue, reported the share at 22% in August 2022, 28% in August 2025 and 35% in August 2026. Lock-volume growth in DSCR and investor loans reached 130% by August 2026, per the same estimates.
Be careful with what that means. The 35% is a share of non-QM production only. It is not a share of all mortgages, and non-QM is a small part of the whole. “DSCR is over a third of everything” is wrong.
As background, not news from the last 45 days: a June 30 HousingWire report on a large national bank said the bank expects non-QM production of $175 billion in 2026, versus $108 billion in 2025, with DSCR and investor products making up about half of non-QM collateral.
What is driving it? I don’t think anyone can isolate a single cause, and the sources I reviewed don’t. A published analysis points to rising prices, more loans above agency limits and other factors. HousingWire cited affordability pushing people toward renting. My read: both are real, and they feed each other. When a mortgage on a primary home feels out of reach, more people rent. More renters means stronger rent rolls for landlords. Landlords then look for loans that qualify on those rents. That is one plausible chain, and it fits the data. It is my interpretation, not a finding.
What Rising Rates Do to the Rent Test
Higher rates make the coverage test harder. Rent has to cover a larger debt payment, and rent does not reset every time Treasury yields move. That is the whole problem in one sentence.
Here is a plain hypothetical. If a rate moves from 7% to 8%, the gap is a full point, and the debt service on the same loan goes up. The rent has not changed. The coverage number gets thinner. A deal that cleared comfortably in the spring can sit on the edge now. I’m not quoting a payment figure. The direction is what matters.
Three consequences follow for investors.
First, thin deals get thinner. A property that barely covered its payment in June may not cover it now. Some lenders review lower coverage with stronger compensating factors, lower leverage or different pricing. Those options exist but come with trade-offs, and exact eligibility depends on lender guidelines, credit, reserves and the property itself.
Second, price discipline matters more. NAR’s 4.9 months of supply gives buyers room to negotiate. So do builders cutting prices and offering incentives. A seller’s concession or a price cut helps the coverage math as much as a lower rate would.
Third, the test cuts both ways. Rent is what the loan is reviewed on, so a property in a soft rental pocket is a problem no matter how the loan is structured. Check the rent comps before you check anything else.
Is this a toss-up between waiting and buying? Honestly, yes. Forecasts disagree. The Fed’s median projection for 2026 rose to 4.1% from 3.8%, per TD Economics, which implies possibly another hike this year. But the dots are split on 2027. Nobody knows the path. If your deal works at today’s cost of money, it doesn’t need a forecast.
My Take
DSCR is crowding in because the market is pushing people toward it, not because it became cheaper. It didn’t. The product grows when conventional financing gets harder for investors to use and when buyers shift toward renting. Both are happening.
I also think the growth deserves some humility. A product that gains share quickly invites scrutiny. HousingWire reported fraud indicators on 1 in 44 investment property applications, and National Mortgage News has warned about a credit cycle. Neither is proven, and I’d call them flags, not verdicts. But a borrower who buys on rent-covers-payment with no margin is exposed if rents soften or a rate resets.
Here’s what I tell anyone who asks. Buy the rent, not the rate. A rate can be refinanced someday, maybe. A property that doesn’t cover itself is a problem on day one.
What I’d Do Now
Model the deal at today’s cost of money. Don’t use the spring’s numbers. Use current rent comps and a current quote, and see whether the coverage holds with room to spare.
Get quotes on the same day. Rates moved 19 basis points in a single week this month. Quotes gathered on different days are not comparable, so a quote from the 10th tells you little about the 24th.
Know what a lock is. A rate lock holds the quoted terms for a set period while you finish the transaction. Floating means you’re betting the market moves your way. In a market climbing four weeks running, floating is a gamble, and if you like the terms and the deal works, lock it.
Use the supply. With more inventory and builder incentives, negotiate. Ask for price cuts or concessions, because they improve coverage directly.
Match the loan to the borrower. A self-employed borrower buying a home to live in may fit a bank-statement loan better than a DSCR loan, which is built for rental property. Bank-statement loans were near 30% of non-QM production in August, per the Optimal Blue data in Stacker’s analysis. I found no direct data on how many self-employed borrowers switched products, so I won’t guess.
If you’re weighing a purchase or a refinance this fall, Lendmire can walk you through how the current programs fit your file. We are a broker. We compare options and place loans with the lenders we work with. The lenders review the file and make the credit decision.
If your plans run toward a second home, the same math applies in a different setting. Our pieces on a vacation home in Wailea and a vacation home in Windermere cover how those purchases look.
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 mortgage rates going up in September 2026?
Yes. Freddie Mac’s survey showed the 30-year fixed rising four straight weeks, to 7.03% for the week of September 24, 2026, from 6.66% on August 27. NPR reported it was the first reading above 7% in 20 months. The MBA’s own contract rate was 7.12% for the week ending September 18.
Is 7.03% the rate a DSCR borrower pays?
No. Freddie Mac’s survey covers conventional, conforming purchase loans for borrowers with 20% down and excellent credit. Use it as a market gauge, then get an actual quote for your scenario. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Why are DSCR loans growing as a share of non-QM?
No source isolates one cause. Optimal Blue’s analysis points to rising prices and more loans above agency limits. HousingWire cites affordability pushing people toward renting. My read is that the two reinforce each other. The share is of non-QM production only, not of all mortgages.
Did the Fed raise mortgage rates?
Not directly. The FOMC raised its target range a quarter point on September 16, 2026, but the Fed’s policy rate does not set long-term mortgage rates. The MBA links the rise to the 10-year Treasury, energy prices, inflation and federal debt. The hike added pressure, but it was one factor among several.
Should I wait for rates to fall before buying?
I can’t tell you where rates go, and the Fed’s own officials are split on 2027. What I can say is that home prices have not fallen. NAR’s median price was still up 1.6% from a year earlier in August, and supply has grown. If the deal works today, waiting is a bet on a forecast nobody can make reliably.
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. Freddie Mac Primary Mortgage Market Survey
3. Freddie Mac release, week of September 3, 2026
4. Freddie Mac release, week of September 17, 2026
5. MBA Weekly Applications Survey, September 23, 2026
6. Federal Reserve FOMC statement, September 16, 2026
7. Kiplinger Fed meeting coverage
8. CNBC Fed decision, September 16, 2026
9. NAA on Freddie Mac mortgage rates
10. MBA Chart of the Week, September 24, 2026
11. MBA Newslink survey summary
12. MBA Weekly Applications Survey, September 16, 2026
13. NAR August existing-home sales
14. Inman on August new-home sales
15. Stacker/KEYT non-QM analysis, September 28, 2026
16. TD Economics FOMC statement analysis
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program 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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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.