The Quick Read: Buyers hold more bargaining power this month than they have in years, and an appraisal contingency is the cleanest way to use it. Inventory is up, sales are slower, and the Federal Reserve raised its target range on September 16. Freddie Mac’s survey has now risen four weeks running. When money costs more, a low appraisal costs you more too, so keep the protection unless you have a strong reason to drop it.
As of September 28, 2026, that is my read of the dated data. The rest of this column lays out what changed, what it means, and what I’d do about it.
Key Takeaways
- Existing-home sales fell in August, and supply is at its highest in over ten years, per NAR’s September 10 report.
- Freddie Mac’s 30-year average has risen four straight weekly readings, from 6.71% on September 3 to 7.03% on September 24.
- Redfin’s August data shows buyer’s-market conditions in many Sun Belt metros. It is not a picture of the whole country.
- An appraisal contingency lets you renegotiate or exit if the appraisal comes in below the contract price. It matters more when each borrowed dollar costs more.
- Waiving the contingency and waiving a lender’s appraisal are separate decisions. Keep them apart.
What Changed: The Dated Facts
Three things moved in the same month: rates, the Fed, and inventory. Together they shifted power from sellers toward buyers. Here is each one, with its source and date.
Rates rose for four straight readings
Freddie Mac’s weekly survey put the 30-year fixed average at 7.03% for the week of September 24, 2026. That was up from 6.95% the week before, an increase of 8 basis points. A year earlier the same survey showed 6.30%.
The path matters more than the level. Freddie Mac’s releases show 6.71% on September 3, 6.76% on September 10, 6.95% on September 17 and 7.03% on September 24. That is +5, +5, +19 and +8 basis points, four increases in a row.
The Mortgage Bankers Association tells the same story on the application side. In its survey for the week ending September 18, the MBA’s 30-year contract rate was 7.12%, the highest since May 2024. Refinance applications were 62% below a year earlier. The unadjusted Purchase Index was 11% lower than a year ago.
Mortgage News Daily’s index closed the day on September 28 at 7.50%. It said the average lender was at that level for the first time since April 30, 2024.
Don’t read those three numbers as a contradiction. Freddie Mac’s survey is a weekly average built from conventional conforming loan applications. Mortgage News Daily tracks daily lender pricing. The MBA’s figure is a third measure. They rise and fall together, but they don’t match to the decimal.
The Fed moved
The Federal Reserve’s statement of September 16, 2026 reported a 12–0 vote to raise the target range by a quarter point, to 3-3/4 to 4 percent. The range had been 3-1/2 to 3-3/4 percent at the July meeting. CNBC called it the first hike in more than three years.
Be careful with the cause and effect here. The Fed’s target rate does not set mortgage rates directly. The MBA’s own commentary points to Treasury yields, inflation and energy prices tied to the Iran war, plus expectations of tighter policy. The Fed’s move fits that picture. It is not the whole cause.
Sales slowed and supply grew
NAR’s report on August existing-home sales, dated September 10, 2026, showed sales down 2.0% from July. The seasonally adjusted annual pace was 3.98 million, the first reading below 4.0 million since June 2025.
Inventory reached 1.62 million units, up 5.9% from a year earlier. That is the first time since November 2019 that it topped 1.6 million. Months of supply hit 4.9, up from 4.6 in July. NAR said that is the highest in over ten years, and that the supply gives buyers better opportunities to negotiate.
One caution keeps this honest. The median existing-home price was $429,100, up 1.6% from a year earlier, the 38th straight annual gain. Buyers have more room to negotiate. Prices have not fallen yet.
Redfin sees buyer’s markets, mostly in the Sun Belt
Redfin’s August buyers-versus-sellers report, dated September 10, 2026, found Nashville with 139% more sellers than buyers. That is the widest gap in its records going back to 2013. Miami had 138% more and Houston 131%.
Redfin’s release says 36 of the 49 metros it analyzed are buyer’s markets. Nationally, sellers outnumbered buyers by 58%, the biggest gap in the firm’s records. Redfin ties part of this to active homebuilding pipelines in Nashville, Texas and Florida.
Redfin’s list is Sun Belt-heavy, and it identifies only five seller’s markets, led by New York City suburbs. Your local market may look nothing like Nashville’s. Check your own market before you decide how hard to push.
What It Means for Home Buyers
An appraisal contingency is a clause in the purchase contract. It says that if the home appraises below the agreed price, you can renegotiate or walk away, usually with your deposit protected. Whether you keep that right depends on what the contract says and whether the clause is still active.
The appraisal gap is the difference between the price you agreed to pay and the appraised value. The lender bases the loan on the lower of the two numbers. If the appraisal is short, you cover the gap in cash, the seller drops the price, or the deal ends.
Here is why September 2026 changes the math.
Every extra borrowed dollar costs more. Suppose a rate moves from 6.7% to 7.0%. That is a plain hypothetical, but it is close to the move Freddie Mac’s survey recorded since September 3. That difference applies to every dollar you borrow, for as long as you hold the loan. A gap you cover in cash is money you don’t have. A gap you cannot cover is a deal you may have to leave.
Sellers have fewer alternatives. When supply is at a ten-year high and buyers are pausing, sellers who insist on a waived contingency have to find another buyer. The MBA’s Joel Kan said on September 16 that higher rates had caused many buyers to pause their purchase decisions. Fewer active buyers means less pressure on you to drop protections.
The appraisal itself is the unknown. The sources behind this column carry no current national data on how often appraisals come in low, or how often buyers waive the contingency. I won’t tell you appraisals are coming in low more often, because I can’t show it. What I can show is that the cost of a surprise has gone up.
Include versus waive, in plain terms
| Factor | Keep the contingency | Waive it |
|---|---|---|
| Low appraisal | You can renegotiate or exit | You may owe the gap in cash |
| Deposit | Usually protected if the clause is active | Can be at risk |
| Seller reaction | May ask for concessions | Reads as a stronger offer |
| Best fit | Buyer’s markets, thin cash cushion | Deep cash cushion, hot local demand |
That last row is the whole decision. Waiving works when you can absorb the gap and the local market still rewards it. In the metros Redfin flags as buyer’s markets, the second condition is weaker than it was a year ago.
Two things buyers confuse
First, waiving the contingency is not the same as a lender waiving its own appraisal. You can waive the contingency, and the lender can still require a full appraisal. The two are independent.
Second, an appraisal contingency is not a financing contingency. The financing contingency protects you if the loan does not come through. The appraisal contingency protects you if the value falls short. Your contract may include one, both or neither.
Also read the whole contract. A contract can carry a clause that covers an appraisal gap on the buyer’s side. That clause can override the protection the contingency would otherwise give you. If you sign one, you have agreed to pay.
My Take
I think the buyers who benefit most this fall are the ones who treat leverage as a reason to hold the line, not a reason to lowball. Rates are rising, and a buyer who keeps the contingency is buying flexibility while it is cheap to ask for.
Here is my thinking out loud on the price question. The bullish read says supply is high, so sellers will cut. The data doesn’t show that yet. NAR’s median is still rising, and the Census Bureau’s new-home median price is down 5.8% year over year but statistically uncertain. Bargaining power can shift before prices do. I lean toward “power first, price later,” but that’s a lean, not a forecast.
The new-home side shows the same pattern. Per Inman’s September 25 report, 38% of builders reported price cuts in September, up from 35%, and 66% used sales incentives. Builders are paying to move inventory. Resale sellers in the same metros face the same pressure, whether they say so or not.
“Buyer’s market” does not mean “easy market.” Redfin’s metric counts sellers against buyers. It does not measure affordability. Redfin has itself warned that leverage doesn’t help people who can’t afford to buy at all. A weak buyer pool is partly a rate problem. Leverage is real, but it is worth less than it looks if the monthly cost still strains your budget.
Where do rates go next? I don’t know. The MBA’s chart of the week notes that higher inventory and slower price growth offset some of the rate increase until recently. That offset is fading as rates climb. Nobody publishing this month can promise the direction from here.
What I’d Do Now
This is practical, not advice to buy or sell any specific property. Your file is different from anyone else’s.
1. Keep the appraisal contingency by default. Drop it only if you have a plain reason and a cash cushion for a gap. In a metro with a wide seller-to-buyer gap, you have more room to ask for it.
2. Read the contract for gap-coverage language. If a clause makes you cover a shortfall, that clause matters more than the contingency.
3. Ask about the removal window. The contract sets when the contingency ends. Know that date, and know what you must do before it.
4. Separate three questions. Do you have a financing contingency? An appraisal contingency? Is the lender ordering its own appraisal? Get all three answered in writing.
5. Decide your walk-away number before the appraisal arrives. It is easier to decide calmly than after a low report.
6. If you like the loan terms, lock. A rate lock holds the pricing terms you have been quoted for a set period. Floating means you ask for no protection and accept the market’s next move. With rates rising four readings in a row, floating is a bet. Quotes gathered on different days are also not comparable, so compare them on the same day.
7. Ask for concessions where inventory is heavy. The seller can cut the price, cover closing costs or fix repairs. Ask before you waive protections, not after.
The Fed dot plot and market pricing point to more tightening, but neither predicts mortgage rates. Plan for a range of outcomes rather than the outcome you’d like.
If you’re self-employed or investing
The same logic applies. A buyer using bank-statement or rental-income underwriting still faces an appraisal, and the lender still orders one. Programs built for self-employed borrowers and investors are described on our loan options page, which carries the current guidelines. For rental purchases, our DSCR loans guide explains how the property’s income is reviewed, subject to lender guidelines. I found no fresh dated data on how these borrowers are behaving right now, 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.
Frequently Asked Questions
Should I waive the appraisal contingency in September 2026?
Keep it unless you have a specific reason and enough cash to cover a shortfall. Supply is at a ten-year high per NAR’s September 10 report, so sellers have less power to insist. Waiving mostly makes sense where local demand is still strong and you can absorb a gap.
What happens if the appraisal comes in low and I have the contingency?
You generally have three choices: renegotiate the price, pay the difference in cash, or exit under the contract’s terms. What you can do depends on the contract language and whether the contingency is still active. Read the timing and gap provisions before you sign.
Does waiving the contingency mean the lender skips its appraisal?
No. They are separate decisions. A buyer can waive the contingency while the lender still requires a full appraisal. A lender’s own waiver, where one is offered, is a different process and depends on the lender’s rules.
Is this a buyer’s market everywhere?
No. Redfin’s August report counted 36 of 49 metros as buyer’s markets, led by Nashville, Miami and Houston. It also identified five seller’s markets, with New York City suburbs at the top. Your local numbers matter more than the national headline.
Will higher rates make home prices fall?
Not yet, based on NAR’s data. The August median was up 1.6% from a year earlier, the 38th straight annual gain. Some commentators argue bargaining power is shifting faster than prices show. That is opinion, and the September figures, due October 13, will be the next check.
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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 FOMC statement, September 16, 2026
3. CNBC on the September Fed decision
4. NAR August existing-home sales
5. Redfin August buyers versus sellers report
6. HousingWire on August new-home sales
7. Inman on August new-home sales and builder incentives
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: Negotiating a House Price As a Buyer · A Home Appraisal Checklist · How Long Does It Take To Buy a House?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.