The 30-Year Crossed 7%. After the Builder's Cut, a New House Costs $315 a Month Less Than the Resale Median.

By Steve Waller · September 25, 2026

The 7% line, and what it took to get there

Freddie Mac's Primary Mortgage Market Survey came in Thursday at 7.03% on the 30-year fixed, up eight basis points from 6.95% the week before. The 15-year went to 6.42% from 6.26%. A year ago those two numbers were 6.30% and 5.49%. This is the first survey reading above 7% since January 2025, about twenty months.

The path there is short and worth reading in order. The FOMC raised the target range a quarter point to 3.75 to 4.00% on 16 September, on a unanimous 12-0 vote. The ten-year Treasury then printed 4.94% on the 17th, 5.01% on the 18th, 4.96% on both the 21st and the 22nd, and 5.11% on Wednesday the 23rd. That last move was fifteen basis points in a single day, and it is the highest ten-year print of the month.

Eight basis points on a survey average is not the story. The 7-handle is a number buyers read as news whether or not it changes their own quote, and the ten-year underneath it is what every rental takeout gets priced against.

Your exit buyer lost $23,900 of Houston house in a year

Houston's August median was $330,000. Twenty percent down leaves a $264,000 loan. At last year's 6.30% that is $1,634 a month of principal and interest. Hold the payment exactly there and go shopping at 7.03% and it now carries $244,874 of loan, which is a $306,092 house.

Same buyer. Same money out of the same paycheck. $23,908 less house. Nothing about that buyer's finances changed and nothing about the house changed, and the number your renovated property has to clear on the exit moved anyway.

The week-on-week version of the same arithmetic is small: 6.95% to 7.03% is about $2,700 of budget, and on its own it is noise. Twelve months of it is not noise, and it is the reason an ARV pulled from spring comps is the most dangerous number in a file right now.

The competitor on your exit is not another resale

Two medians moved in opposite directions in August. Census put the new-home median at $393,700, up 0.4% on the month and down 5.8% on the year. NAR put the existing-home median at $429,100, up 1.6% on the year. New construction is now the cheaper half of the market at the median, by $35,400.

Then add what the builder does on top of the price. NAHB's September survey has 38% of builders cutting prices, up from 35% in August, with the average cut holding at 6% for the sixth month running, and 66% using incentives, the highest share since December. Builder sentiment itself fell three points to 32.

Run the two houses side by side at Thursday's 7.03%, twenty percent down, principal and interest only:

• Median new home at $393,700: $2,102 a month
• Median existing home at $429,100: $2,291 a month
• Median new home after the average 6% cut, $370,078: $1,976 a month

The resale median costs the buyer $315 a month more than the discounted new build. Put another way, that existing house would need a rate of 5.62% to reach the same payment, which is 141 basis points below anything on offer. Roughly $3,780 a year, before anyone gets to granite or a rate buydown on top.

This is the part worth carrying into the next offer. The exit is not a contest between your renovated house and the tired one two streets over. In a submarket with new construction in it, the buyer is comparing your house to a brand-new one at a lower price with a builder's incentive attached, and that comparison is being made at the payment, not the sticker.

The 6.4% rebound does not clear its own margin of error

Thursday's headline was that new-home sales rose 6.4% in August to a 684,000 annual rate. Census publishes that change as 6.4% plus or minus 19.5%, which is a range running from minus 13.1% to plus 25.9%. Zero sits comfortably inside it. The year-over-year figure, minus 2.0% plus or minus 15.7%, has the same problem. So does the South's 451,000 and its reported 6.9% gain, quoted at plus or minus 27.7%.

None of that means the month was bad. It means the monthly change is not the number to underwrite against, and a headline built on it is a headline built on sampling noise.

What does survive is the level. 483,000 new houses were for sale at the end of August, which is 8.5 months of supply at the current sales rate. Existing homes are carrying 1.62 million units and 4.9 months. Eight and a half months on the new side, against a builder base that has been cutting 6% every month since spring, is the supply that sets the ceiling on your exit price. That figure does not come with a plus-or-minus that swallows it.

Houston: 5.3 months, 54 days, and a median that went backwards

The local picture from HAR's August report, for the market most of these files sit in:

• 7,100 single-family closings, down 11.5% on the year
• 38,947 active listings, up just 0.5%
• 5.3 months of inventory, flat, against 4.9 nationally
• 54 days on market, from 52 a year ago
• Median $330,000, down 1.5%; average $426,760, up 1.2%
• Pending sales 7,939, down 3.5%

The listing count barely moved while closings fell 11.5%. That is the same point this brief made on Wednesday and it has not changed: the extra supply in Houston is coming from the buyer side, not from sellers flooding in. Pending sales at 7,939 against 7,100 closings says September closings should hold up reasonably. It does not say anything about price.

Fifty-four days is also the number to put in the carry line. Not thirty, and not the thirty-one days NAR reports nationally.

The rehab budget moved too, and quietly

The financing side gets the attention because it prints every Thursday. The cost side moved further. BLS producer prices for goods inputs to residential construction rose 0.9% in August and are up 7.8% on the year. Services inputs are also up 7.8%. Underneath that: softwood lumber up 13.0% year over year despite falling 2.5% in the month, plywood and softwood veneer up 12.5%, and nonferrous wire and cable up 19.6%, which is the copper in every rewire. Energy inputs are up 46.2% on the year, with diesel up 77.7%, and that lands on every delivery and every dumpster.

A rehab budget built off last spring's numbers is roughly 7 to 8% light before a single change order. On a $60,000 scope that is about $4,500, and it comes out of the same margin the rate move is already eating.

What this changes on a file this week

• Underwrite the exit against new construction, not only resale comps. If there is a builder within a few miles of the subject, the median new house at $393,700 with a 6% cut and an incentive is a live competitor at your price point. Find out what it is actually closing at.
• Put 54 days in the carry line, not 30. Houston's number is 54 and rising. A six-month hold assumption is reasonable; a ninety-day one is optimistic in this market.
• Reprice the rehab at current input costs. Lumber up 13%, copper wire up 19.6%, energy up 46.2%. A budget quoted in March is not a budget today.
• For a rental exit, get the actual quoted rate before running coverage. DSCR pricing tracks the ten-year, which is seventeen basis points above where it sat a week ago. On a $250,000 takeout, 25 basis points is about $42 a month, which is real money against a coverage test that is often decided in the second decimal place. Put the number you were quoted into the DSCR calculator rather than last month's.
• Rebuild the offer from the exit backwards. ARV times 70 to 75%, less repairs, less closing costs, is the maximum purchase price. When the ARV comes down, so does the offer. The formula does not bend for a seller who has not read the Census release.

None of this makes Houston a bad market to buy in. Record listings and 54 days on market are a buyer's conditions, and the purchase test clears on more properties now than it did in the spring. What it does mean is that the exit assumption is the number under the most pressure, and it is the one most often copied forward from the last deal.

Sources

• Freddie Mac Primary Mortgage Market Survey, 24 September 2026
• Federal Reserve, FOMC statement, 16 September 2026
• FRED, 10-Year Treasury Constant Maturity Rate (DGS10)
• US Census Bureau and HUD, New Residential Sales, August 2026
• National Association of Realtors, Existing-Home Sales, August 2026
• NAHB/Wells Fargo Housing Market Index, September 2026
• Houston Association of Realtors, Monthly Housing Update, August 2026
• Bureau of Labor Statistics, Producer Price Indexes, August 2026
• NAHB Eye on Housing, residential construction input prices, September 2026

Market data is from public sources and is provided for information only. Nothing here is an offer of credit, a rate quote, or investment advice. Financing is subject to underwriting, lender approval, appraisal or valuation, title, insurance, property eligibility and program availability.

All briefs