The Quick Read: As of September 28, 2026, your score matters more than it did this summer. The Fed raised its target range on September 16, and Freddie Mac’s survey put the 30-year fixed at 7.03% for the week of September 24. When borrowing costs climb, each step in pricing costs more, and each step in qualifying gets tighter. My advice is to check your credit now, fix what you can, and do it before the next rate move makes the same work cost more.
Here’s the short version of why. A lender prices a loan on the market and on the borrower. The market part is moving against you. The borrower part is the one piece you can still work on.
Key Takeaways
- The Fed raised its target range by a quarter point on September 16, 2026, on a 12–0 vote. Mortgage rates follow long-term yields more than the Fed’s overnight rate.
- Freddie Mac’s weekly average topped 7% for the first time since January 2025, per NPR’s report of September 24.
- Your score decides where you land in the lender’s pricing tiers. When rates are rising, a bad tier costs more.
- On September 9, FHFA opened VantageScore 4.0 to all approved lenders. Lenders choose the model. You don’t.
- Pull your reports now. Errors and high card balances are the fixes you control.
What Changed: The Dated Facts
Three things moved in September: the Fed, the bond market, and the rule for credit scores.
The Fed first. The FOMC statement of September 16 raised the target range by a quarter point, to 3-3/4 to 4 percent. The vote was 12–0. The statement says inflation “remains elevated.” CNBC called it the first hike since July 2023 and reported that 16 of 18 officials expected at least one more. The next meeting is October 28.
Now mortgage rates. Freddie Mac’s survey put the 30-year fixed average at 7.03% for the week of September 24. That was up from 6.95% the week before, a gain of 8 basis points. A year earlier the average was 6.30%, so the survey is up 73 basis points on the year. Freddie Mac’s survey for the same week showed the 15-year average up 16 basis points on the week. NPR reported that the average had not topped 7% since January 2025. By the end of February, the survey average had dipped below the 6% mark, then reversed.
The daily picture is sharper. Mortgage News Daily’s rate page, captured September 28, showed the average lender at 7.50%. MND says that is the first time since April 30, 2024. MND also says its daily index first crossed 7% on September 10. Freddie’s weekly number lags because it averages the prior several days. Both are correct. They measure different things on different schedules.
The bond market set the pace. CNBC reported on September 26 that the 10-year Treasury yield hit 5.23% on Friday, September 25, its highest since 2007. It had been just under 4.8% early in the month. The yield was already climbing before the Fed met. That matters, and I’ll come back to it.
Borrowers felt it in applications. The MBA’s weekly survey, released September 23, covered the week ending September 18. The 30-year contract rate rose to 7.12% from 6.97%. The Refinance Index fell 3% on the week and sat 62% below a year earlier. The seasonally adjusted Purchase Index fell 1%, and the unadjusted index was 11% below a year earlier. Three weeks earlier, for the week ending August 28, the MBA had the contract rate at 6.79%. That is a 33 basis point climb in three weeks.
Then the score rule. FHFA says that on September 9, 2026, Fannie Mae and Freddie Mac opened VantageScore 4.0 to all approved lenders. Lenders no longer need written approval first. They may still use Classic FICO.
Why Does a Rate Hike Make Your Score Matter More?
Because a rising market widens the cost of every weakness in your file. Lenders price loans in tiers based on the borrower’s credit profile and the loan’s features. When the base market rises, the gap between a strong tier and a weak one costs real money. Nothing about the tiers changed. The stakes did.
Here is a plain hypothetical. If a market rate moves from 6% to 7%, a full point, everyone pays more. A borrower sitting in a weaker tier pays that full point plus whatever the tier adds on top. The hike raises the floor, and your score decides how far above it you sit.
The second effect is qualifying. Lenders check that your monthly debts fit your income. Higher rates mean a higher payment on the same loan. So the same borrower can clear a file in spring and strain it in fall. A stronger score won’t shrink the payment itself. It can help you land in a better tier, and that gives your debt-to-income math more room.
I’m deliberately not quoting score cutoffs here. They differ by program, by lender and by loan profile, and they move. The page with current guidelines is our loan options page, and eligibility is always subject to lender guidelines.
Does the Fed Set Mortgage Rates?
No. The Fed sets an overnight rate for banks. Mortgage rates track long-term yields, and the 10-year Treasury is the usual reference point. That’s why the 10-year was already near 5.04% intraday on September 15, per CNBC, the day before the Fed acted.
What the hike did was confirm the direction. The dot plot pointed to more tightening. Yahoo Finance reported futures odds of about 70% for an October hike. CNBC cited CME FedWatch at 64%. Sources differ on the odds, and I’d treat both as a rough read, not a forecast.
Nobody knows how much of this move is the Fed versus bond supply. One large national bank’s asset management arm points to economic strength and heavy AI-related debt issuance competing for capital. CNBC cites the same supply. Mortgage News Daily says oil explains little of the recent momentum. My read: the Fed is part of the story, not all of it. Don’t plan around a Fed pause rescuing your rate.
What Does the Housing Data Say?
It says buyers have some leverage, and rates are taking it back. The NAR report of September 10 showed August existing-home sales at 3.98 million annualized, down 2.0% on the month and down 1.2% on the year. Inventory was 1.62 million homes, a 4.9-month supply. NAR’s median price still rose 1.6% year over year, the 38th straight annual gain. NAR also put the Freddie Mac average for August at 6.67%, up from 6.54% in July.
HousingWire’s coverage of that report adds that first-time buyers were 30% of sales, up from 28% a year earlier. All-cash buyers were 27%. So first-time buyers are showing up. They are also the group with the least room to absorb a pricing penalty.
New homes tell a different story. Census reported August new-home sales at 684,000 annualized, with supply at 8.5 months. Census says neither monthly nor annual change in sales is statistically significant. Inman noted that the average new-home price, down 8.8% on the year, was the one statistically significant move. It also cited builder survey data showing 38% of builders offering discounts and 66% using incentives in September.
Don’t read this as “prices are falling everywhere.” Existing-home prices are still up. New-home figures are noisy. More inventory and more builder incentives do help a buyer. Higher financing costs take some of that back.
The Score Model Question
This is the piece most borrowers have wrong. You do not get to choose your score model, because that decision belongs to the lender.
The FHFA FAQ says lenders choose between Classic FICO and VantageScore 4.0. For now, Fannie Mae and Freddie Mac will not accept scores from multiple models on a single loan. VantageScore’s own release of September 4 says its model was the sole score on over 9% of securitized loans since May 1, as of August 31. That is an interested party, so read it as a signal of adoption and nothing more.
Does the switch change pricing for an individual borrower? I found no data either way. FHFA opened the door. It is unproven that any borrower’s pricing improves. So my practical advice is narrow. Ask the lender which model they use before you apply, and don’t expect the switch to rescue a messy file.
My Take
I’ve been in lending for eighteen years, and rising-rate stretches share a pattern. Buyers wait for the market to hand them relief. The ones who improve their file while they wait are better placed whatever the market does.
My read is simple. Rate direction is out of your hands. Your credit file isn’t. A score that took months to build and that you never checked is a risk you can retire in a few months, at no cost beyond your attention.
Here’s a thing I’d push back on. “I’ll wait until rates come down, then fix my credit.” That sequence is backwards. If rates fall, every buyer rushes in at once, and you’d rather arrive with a clean file. If they keep rising, you’ve lost ground twice. Fix the file first.
It’s a toss-up on one point: whether to buy now or wait. I won’t tell you to do either. The data doesn’t settle it. Sales are soft, inventory is at a decade high, and financing costs are at multi-year highs. Reasonable people land on both sides. What the data does settle is that your credit file is worth attention either way.
There is also a point about where borrowers go when a conventional path gets tight. Non-QM lending, which qualifies borrowers on something other than standard tax-return income, is growing. HousingWire reports that a major bank’s research arm expects $175 billion of non-QM originations this year, up from $108 billion in 2025. Optimal Blue lock data, as reported in a September 28 syndicated analysis, showed conforming loans at 47% of August locks, the largest category but no longer a majority. Investor and DSCR loans were above 35% of non-QM production in August, up from 29% in July 2025. That is a secondary report, so take it as reported.
Non-QM isn’t a workaround for a weak file. Those loans still get reviewed on credit, and lenders price them accordingly. Vendor commentary from MCT says self-employed non-QM loans are performing worse than DSCR and full-doc loans. Lenders are watching. If you’re self-employed, expect your credit file to get a hard look. Our articles on the credit score needed for a self-employed HELOC and on the minimum credit score for a cash-out refinance cover those situations.
What I’d Do Now
None of this is advice to buy or sell anything. It’s a checklist for the file, in the order I’d work it.
1. Pull all three credit reports. Read them line by line. You want to see every account, balance, late mark and collection. Errors are common enough to be worth the check. Dispute anything wrong, in writing, with documents.
2. Bring revolving balances down. High card balances against limits are one of the larger levers you control. Paying them down tends to show up in a score once the lender reports the new balance. Bureau updates take time, so this is the step to start first.
3. Stop adding new debt. A new card, an auto loan or a store financing offer in the months before an application adds a fresh inquiry and a new balance. Hold off until the loan is done.
4. Protect payment history. One missed payment can undo months of work. Automate the minimums on everything.
5. Ask which score model the lender uses. Since FHFA’s September 9 change, the answer may differ from lender to lender. Knowing it tells you which report to watch.
6. Understand what a rate lock is. A lock is an agreement to hold a quoted rate for a set period while your loan is processed. Floating means you haven’t locked and you ride the market. In a rising market, floating is a bet that rates will stop. If you like the rate and the payment works for your budget, lock it. If you float, have a limit in mind for how much of a move you can absorb.
7. Compare quotes on the same day. Rates moved more than half a point in two weeks, per Mortgage News Daily’s September 25 newsletter. A quote from Tuesday and one from the following Tuesday are not comparable. If you’re collecting quotes, collect them together and compare them on the same terms.
8. Don’t quote the headline to yourself. Freddie Mac’s 7.03% covers a narrow slice of borrowers: conventional, conforming, purchase loans. It is a market gauge, not a quote for your file. Your credit and loan profile decide where you fall relative to it.
One more item. I’d avoid anyone promising a score jump by a date. Credit repair is not instant. That is my judgment, not a sourced statistic, but I’d stand behind it.
If you’re weighing a purchase or a refinance this fall, Lendmire can walk you through how the current programs fit your file.
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
Should I wait to buy until my score improves?
It depends on where your file is and what your timeline is. If your reports are clean and your balances are low, waiting buys you little. If you have errors to dispute or heavy card balances, a few months of cleanup can change your pricing tier. Either way, start the cleanup now, because it costs nothing and the market isn’t waiting.
Did the Fed’s hike raise my mortgage rate directly?
Not directly. Mortgage rates follow long-term yields, and the 10-year Treasury was climbing before the September 16 decision. The hike confirmed the direction and kept pressure on yields. A fixed-rate loan you already have doesn’t change. If you’re still shopping, your quote reflects the market on the day you lock.
Can I choose between FICO and VantageScore?
No. FHFA’s FAQ says lenders choose the model. As of September 9, approved lenders may use VantageScore 4.0 or Classic FICO without a separate approval step. Ask your lender which one they pull. For now, the Enterprises will not accept scores from more than one model on a single loan.
Will the new score model lower my rate?
I found no data showing that it does. FHFA opened the door, but lenders decide whether to walk through it, and pricing differences by model are unproven. Treat the change as a fact to ask about, not a reason to delay an application.
Is 7.03% the rate I’ll get?
No. Freddie Mac’s weekly survey is a market average for a narrow set of loans, and the week of September 24 is already behind us. Mortgage News Daily’s daily index ran higher on September 28. Your own quote depends on your credit, your loan type and the day you lock.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage broker with two platforms: DSCR investor lending across 41 markets, including Washington, D.C., and consumer mortgage programs in 16 states, all arranged through wholesale lending partners. This column is written by Lendmire’s founder and reflects the market as of its publication date; program terms and availability are set by the lender on each file. 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, September 24, 2026
2. Federal Reserve FOMC statement, September 16, 2026
3. CNBC
4. NPR, mortgage rates, September 24, 2026
5. CNBC, 10-year Treasury yield, September 26, 2026
6. MBA Weekly Mortgage Applications Survey, September 23, 2026
7. CNBC
9. NAR existing-home sales report, August 2026
10. HousingWire’s coverage of that report
11. Inman noted
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
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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.