The Quick Read: As of September 28, 2026, buyers have more homes to pick from and more room to negotiate than they’ve had in years. Rates have risen four weeks running, so the payment a neighborhood forces on you matters as much as the sticker price. Use the extra choice to judge an area on its long-term fundamentals. Don’t let a discount on one house pick the neighborhood for you.
Here is the short version of a long month. Supply is up. Builders are cutting prices. Borrowing costs are climbing anyway. That combination rewards patience about the neighborhood and discipline about the budget.
Key Takeaways
- NAR reported 1.62 million homes for sale in August, with 4.9 months’ supply, which NAR’s Lawrence Yun called the highest in over ten years.
- Freddie Mac’s 30-year average rose four straight weeks, from 6.66% to 7.03% for the week of September 24, 2026.
- Builders are discounting: 38% cut prices in September and 66% used incentives.
- More choice lets you compare neighborhoods on fundamentals. Price alone is a weak guide.
- Your carrying cost depends on the area’s taxes, insurance and your own loan, not on a national average.
What changed in September?
Inventory climbed while rates climbed with it. Both matter to a buyer, and they pull in opposite directions.
On supply, NAR’s existing-home sales data for August 2026 shows sales down 2.0% to 3.98 million. Inventory rose to 1.62 million homes. That is 4.9 months’ supply, meaning how long the current stock would last at the current sales pace. NAR’s Lawrence Yun said it gives buyers better opportunities to negotiate. NAR’s September report is due October 13.
New construction tells a similar story. The Census and HUD new residential sales report, released September 24, put August sales at a seasonally adjusted annual pace of 684,000. Supply stood at 8.5 months. One caution: Census warns that its monthly changes carry wide margins of error, and one month is not a trend.
Builders are visibly working for the sale. The NAHB’s September survey found 38% of builders cut prices, up from 35% in August. The average cut was 6%. And 66% used incentives, the highest share since December. NAHB’s chairman said buyer traffic has weakened largely because of rising mortgage rates.
Now the other side. Freddie Mac’s survey put the 30-year fixed at 7.03% for the week of September 24, 2026. That was up from 6.95% the week before and 6.30% a year earlier. The four weekly moves, per Freddie Mac’s releases, ran from 6.66% to 6.71%, 6.76%, 6.95% and 7.03%. That is roughly 37 basis points in a month.
The Fed added pressure. In its September 16 statement, the FOMC voted 12–0 to raise the target range by a quarter point, to 3-3/4 to 4 percent. It said inflation “remains elevated.”
One caveat on those figures. Freddie Mac’s survey covers conventional, conforming purchase loans for borrowers with 20% down and excellent credit. It is a benchmark for direction, not a quote for any individual. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Does more inventory mean you should wait?
Not by itself. More supply helps your negotiating position. It does not cancel the cost of waiting.
Look at what demand is doing. The MBA’s weekly survey, released September 23 for the week ending September 18, showed the seasonally adjusted Purchase Index down 1%. The unadjusted index sat 11% below a year earlier. The MBA’s contract rate for conforming loans rose to 7.12% from 6.97%. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
So sellers and builders are facing thinner demand. That is why you see cuts and incentives. But rates are moving up, and the Fed’s statement gives no sign of retreat. Some outlets read market pricing as pointing to at least one more hike by December. Others read the Fed’s own projections as implying only one more quarter-point step. Nobody knows.
My read: waiting for a perfect price is a bet on two things at once, falling prices and steady rates. The first is plausible. The second is not something I’d underwrite in my own budget. If you like a house and the numbers hold, decide on the house. (Discounts fade when the listing next door sells.).
Why the neighborhood matters more when prices soften
A price cut fixes the purchase price. It doesn’t fix a bad location. When you can negotiate, you are tempted to pick whichever home is discounted most. That is backwards.
I’ve watched buyers in eighteen years of lending treat the price as the decision and the neighborhood as an afterthought. The neighborhood is the part you can’t renegotiate later. You can repaint a kitchen. You can’t move the highway.
Also be careful with headlines. Trade press reported, citing Realtor.com data, that active inventory was up 5.8% year over year and the median listing price down 1.3%, the 36th straight weekly decline. Those are national listing figures, not sale prices, and I haven’t verified Realtor.com’s own page. Calculated Risk also notes significant regional differences in supply. Some areas are flooded with listings. Others remain tight. Your local numbers decide your leverage, not the national ones.
How do you judge a neighborhood on fundamentals?
Start with what lasts. Fundamentals are the features that support demand for homes in an area five and ten years out. A discount can’t buy them.
Jobs and commute. Where does the area’s work come from, and how many employers does it rely on? Drive the commute at the hour you’d actually make it. September is a good month for this. Schools are in session and traffic is real.
Schools, even if you have no kids. Buyers of your home later will ask about them. Check the district’s own published data and how assignment works.
Supply pipeline. New construction nearby can be good or bad. Builders discounting 6% on average means new inventory competes with resale homes in the same area. Ask what is being built and what is being cut.
Days on market and price trend at the neighborhood level. A listing agent can pull these for the specific area. A national average won’t tell you whether your target streets are softening or holding.
Environmental and infrastructure risk. Check flood maps, wildfire exposure and industrial neighbors. These affect insurance and resale in ways a listing photo never shows.
Physical character. Visit on a weekday evening and a weekend morning. Walk it. Talk to a neighbor if one is outside. Note what the noise sounds like at 6 p.m.
Score two or three neighborhoods against the same list. Write the scores down. Emotion is fine, but put it in a column and make it compete with something.
The payment question (it’s about the area, not just the rate)
With rates up four weeks running, the monthly cost of a home depends heavily on where it sits. That is the payment-sensitive buyer’s real question.
Three parts of the monthly cost change with the neighborhood:
- Property taxes. They vary by county and city, sometimes sharply across a single street.
- Homeowners insurance. Flood, wind and fire exposure move it, along with the age and condition of the home.
- HOA dues. Some new-construction communities carry them. Add them to your budget from day one.
I won’t quote dollar figures for any of these, because they are local and change. Ask each listing agent for the actual tax and insurance history on a specific property, and get an insurance quote before you write an offer.
Then consider how much rate movement matters. Take a plain hypothetical. If a rate moves from 6.75% to 7.75%, the difference is a full point, and on any given loan that shows up in the payment every month for years. You don’t need my math for that. You need your own numbers from a real quote.
That’s also why a builder’s incentive deserves a hard look. The NAHB says 66% of builders are using them. HousingWire notes that one large builder is leaning on rate buydowns and closing-cost help, and its margins have fallen. A buydown lowers your cost for some period, but the price on the contract and the cost after the incentive ends are different things. Ask what the payment looks like when the help stops. And remember that builder cuts don’t mean new homes are cheap: Census says the change in the median new-home price wasn’t statistically significant.
My take
Buyers finally have leverage, and the temptation is to spend it on price. I’d spend it on the neighborhood.
Here is the reasoning. A 6% builder cut is real money once. A weak location costs you every year you own the home and again when you sell. Rising rates make that worse, because a higher borrowing cost narrows the pool of future buyers who can afford your house. The homes that hold value in that world sit in places people want regardless of the rate environment: near jobs, near decent schools, with a stable supply pipeline.
This is a genuine toss-up on timing. Inventory and negotiating room say you have time. The Fed and the four-week rate run say time has a price. I’d resolve it by narrowing the search, not by waiting. Pick your two best neighborhoods this month, tour them in September conditions, and be ready to move on the right house.
What I’d do now
Get preapproved and price your comfort zone first. Know the monthly cost you can carry at today’s market, not last spring’s. Compare loan options rather than assuming one product fits. Our loan options page carries the current guidelines, subject to lender guidelines and your file.
Understand what a rate lock is. A lock holds your quoted rate for a set period while you move toward closing. Quotes gathered on different days are not comparable, because rates moved this month alone. Mortgage News Daily’s index, a different measure than Freddie Mac’s, read 7.43% on September 25, and trade press reported 7.50% on September 28. The three benchmarks differ by construction: different borrower profiles. If you like the house and the payment works, lock it. Floating is a bet, not a strategy.
Build a short list and score it. Two or three neighborhoods, the same criteria, written down.
Negotiate on the whole deal. Ask for repairs, credits and closing-cost help, not only a lower price. With supply up, sellers and builders have more room to say yes.
Keep an eye on the October 13 NAR report. It will show whether September’s supply held or eased.
If you’re weighing a purchase or a refinance this fall, Lendmire can walk you through how the current programs fit your file. Investors reading this should know the same logic applies: for a rental purchase, our DSCR loans guide explains how qualifying on the property’s rent works, though the neighborhood question comes first there too.
Frequently Asked Questions
Is now a good time to buy with inventory this high?
It’s a better time to negotiate than it has been in years. NAR reported 4.9 months’ supply for August, which Lawrence Yun called the highest in over ten years. The offset is that Freddie Mac’s 30-year average has risen four straight weeks. Weigh both, and decide on your budget rather than on a forecast.
Should I wait for prices to fall further?
Waiting is a bet that prices drop faster than borrowing costs rise. Realtor.com listing prices, as reported by trade press, have fallen 36 weeks running, but listing prices are not sale prices. NAR still showed existing-home prices up 1.6%. I wouldn’t wait on a house you like and can afford.
Do builder price cuts make new homes a better deal?
Sometimes, but read the fine print. NAHB says 38% of builders cut prices in September, with an average cut of 6%, and 66% offered incentives. Census found the change in the median new-home price not statistically significant. Compare the total cost with any buydown ending, not just the sticker price.
What is the difference between Freddie Mac’s rate and the rate I’ll be offered?
Freddie Mac’s survey reflects conventional, conforming purchase loans for borrowers with 20% down and excellent credit. Your own rate depends on your credit, down payment, loan type, property and the day you lock. Treat the survey as a direction signal and get a real quote for the number. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Is inventory rising everywhere?
No. Calculated Risk notes significant regional differences, and some markets remain tight. National figures show a trend, not your street. Ask a local agent for neighborhood-level days on market, price cuts and active listings before you count on a discount.
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References
2. Census and HUD new residential sales
3. NAHB Housing Market Index, September 2026
4. Freddie Mac Primary Mortgage Market Survey
5. MBA Weekly Applications Survey, September 23, 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: Do I Need a Realtor To Buy a House? · Buying A House Without An Agent In A Rising-rate September · How To Get Your House Ready To Sell
Brandon Miller
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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.