The Ten-Year Printed 5.18% This Week. Houston's Average Rent Fell Two Dollars in a Year.

By Steve Waller · September 27, 2026

The Ten-Year Printed 5.18% This Week. Houston's Average Rent Fell Two Dollars in a Year.

The ten-year Treasury closed Thursday at 5.18%, the highest print since 2007, and Freddie Mac's survey crossed seven percent at 7.03%. Houston's average single-family rent in August was $2,412 against $2,414 a year ago. Everything that moved this week moved on the financing side: on the median Houston house the same monthly payment now reaches about $2,700 less than it did last Friday and about $8,900 less than it did on 1 September.

The week in one sentence

The long end of the curve broke out, and nothing on the property side moved at all.

Here is the ten-year Treasury session by session from the Treasury's own daily curve: 4.96% Monday, 4.96% Tuesday, 5.11% Wednesday, 5.18% Thursday, 5.17% Friday. It ended the previous Friday at 5.01% and it began the month at 4.79%. Thursday's 5.18% is the highest print since 2007. The thirty-year Treasury finished the week at 5.49%, up from 5.34% a week earlier, while the two-year went from 4.76% to 4.81% - five basis points at the short end against sixteen at the ten-year and fifteen at the thirty. The Fed raised its policy rate nine days ago and the part of the curve that prices your exit has gone up every week since.

Wednesday is where it happened. S&P Global's flash September PMI put composite output at 58.4 against 56.0 in August, services at 58.7 and manufacturing at 57.0 - and reported that input costs across goods and services rose at the fastest rate since October 2022. Growth at a five-year high with cost inflation at a four-year high is the one combination the bond market cannot read as good news, and it took the ten-year fifteen basis points in a session.

What that cost the buyer you are selling to

Freddie Mac's survey printed Thursday at 7.03% on the thirty-year, up from 6.95%, with the fifteen-year at 6.42% from 6.26%. It is the first seven handle in the survey since January 2025. A year ago the same survey read 6.30%.

The arithmetic on HAR's August median of $330,000, twenty percent down, thirty-year amortising:

At 6.95%, principal and interest on a $264,000 loan is $1,748 a month. At 7.03% it is $1,762.
Hold the payment at $1,748 and the loan it supports falls to about $261,900, which at the same twenty percent down is a house of about $327,300. That is roughly $2,700 of exit price gone this week.
Run it from the start of the month, 6.76% to 7.03%: the same payment reaches about $321,100. September has taken about $8,900.
Run it from a year ago, 6.30% to 7.03%: about $306,100. Your buyer's budget is down roughly $23,900 on an unchanged payment.

Fourteen dollars a month is not a story. Twenty-four thousand dollars of reach is the whole story, and none of it is visible in a comp set. A purchase test run in August against August's exit rate is not conservative today; it is simply wrong by about nine thousand dollars of resale.

The rental side got worse without the rent moving

HAR's August rental update is the cleanest illustration of the squeeze on the desk right now. Houston leased 4,805 single-family homes in August, up 4.7% on the year, at an average of $2,412 against $2,414 a year ago, with days on market at 36. Volume up, price flat to two dollars lower. Townhome and condo leases averaged $2,014, up 2.4%, on active listings up 9.0%.

So take a Houston rental at that average rent and size the takeout at a 1.20 lender coverage ratio on gross rent. That allows a full payment of about $2,010. Assume taxes of $6,000 and insurance at the Texas average of $3,291 - both assumptions, not quotes - and escrow takes $774, leaving about $1,236 for principal and interest.

At a takeout quoted at 7.25%, that payment supports about $181,100 of loan.
Add the sixteen basis points the index added this week and it supports about $178,300. That is $2,800 of proceeds.
Add the thirty-eight basis points September has added and it supports about $174,500. $6,600 gone this month, with the rent roll unchanged.

Rent is the input a landlord can improve. It did not move. Every dollar of coverage lost in Houston this month was lost on the financing side, which is the side you can reprice in two minutes and the seller cannot argue with.

Thursday's new-home release, and the number that actually moved

Census reported August new residential sales on Thursday. New single-family sales ran at a 684,000 annual rate, up 6.4% on the month against a confidence interval of plus or minus 19.5%, and down 2.0% on the year against an interval of 15.7%. Neither change means anything; Census says as much in the release.

The prices and the overhang do mean something. The median new-home price was $393,700 against $417,900 a year ago - down 5.8%. 483,000 new houses stood unsold at month end, which is 8.5 months of supply, down from a revised 9.0 in July. Houston's resale market carries 5.3 months. The builders are still holding roughly three months more inventory than the resale market, and they are the only seller in the market who can buy a rate down.

Put that against the discount NAHB measured in the same month: 38% of builders cut prices in September, by 6% on average, and 66% used some incentive. Six percent off the new median is $370,100, and at 7.03% with twenty percent down that is $1,976 a month against $2,291 on the $429,100 national existing median. A new house is $315 a month cheaper than the resale median before a single incentive is counted. Friday's brief works that through, and Monday's prices the cut in basis points.

Houston's August set is unchanged, and it is still the frame

HAR's August report remains the current one: 7,100 single-family closings, down 11.5% on the year, a median of $330,000 - five thousand dollars lower than last August - an average of $426,760, up 1.2%, 38,947 active listings, up 0.5%, 5.3 months of inventory, 54 days on market against 52, and 7,939 pending sales.

Listings flat, inventory flat, and closings down a ninth. That is not a supply story and it never has been. The pile of houses is the same size; fewer people reach the payment on it each month, and this week made the payment harder to reach again. Wednesday's brief has the full set.

Two costs that do not care what the ten-year does

The August producer price release carries the line that belongs in every rehab budget written this autumn: processed goods for intermediate demand rose 1.8% in August and 11.5% over twelve months, with diesel up 24.1%. That is the material and the haulage in a renovation. Wednesday's PMI said the same thing from the other direction, and it said it about September.

Insurance is the other, and the Texas Department of Insurance publishes the history itself: the average Texas homeowners premium was $1,961 in 2019 and $3,291 in 2024. Approved statewide average rate changes ran 21.1% in 2023, 18.7% in 2024, then 4.3% in 2025. The increases have slowed on top of a step change you carry for the whole hold - and on a small rental it decides coverage more often than the rate does. The $774 of escrow in the arithmetic above is most of the reason that rent supports $181,000 rather than $240,000.

Then set the margin beside it. ATTOM's most recent flipping data, the first quarter of 2026, puts the national gross return at 25.4% on a typical $66,000 gross profit over 165 days. The Texas metros on that same gross measure, before a dollar of rehab: Houston 7.2%, San Antonio 5.1%, Dallas 4.3%, Austin 2.0%. A gross margin that thin does not absorb an eleven percent materials year and a nine-thousand-dollar move in the exit price at the same time.

The week ahead

Tuesday 29 September, 9:00am Central - BLS Job Openings and Labor Turnover for August. The labour print the bond market reads on the way into Friday's payrolls.
Wednesday 30 September, 7:30am Central - BEA Personal Income and Outlays for August, with the third estimate of second-quarter GDP. This is the PCE print the committee's next decision runs on, and the September projections already carry a 3.7% median for the year. After Wednesday's PMI, this is the week's real risk to the ten-year.
Thursday 1 October, 9:00am Central - Census Construction Spending for August, and 11:00am Central - Freddie Mac's weekly survey, which has now crossed seven percent and is still behind a ten-year that has climbed four weeks running.
Friday 2 October, 7:30am Central - BLS Employment Situation for September. The first September labour reading, and the one number that could take the long end back down.
All week - the ten-year. It closed Friday at 5.17% after touching 5.18%. While it holds above five, every takeout quoted in August is quoted wrong, and every rental file underwritten at a summer rate needs rerunning before an offer goes out.
ATTOM's second-quarter flipping report is now overdue. The first-quarter report landed on 18 June and last year's second-quarter report landed on 17 September. When it appears it is the first read on whether Houston's 7.2% gross and Austin's 2.0% have moved, and those two figures are carrying a great deal of weight in every underwrite on this desk.
Further out: the FOMC meets 27 and 28 October, with no projections attached. Nothing between now and then changes the shape of the September dot plot, which had the funds rate flat through the end of 2027.

What this changes about a file on the desk

Nothing this week changed which deals work. It moved the clearing price down again - about $2,700 of exit on a median Houston house, about $8,900 for the month - and it took another $2,800 off what a Houston rental at the average rent can refinance into.

The response is the same as it was on Friday, and it is mechanical rather than clever. Rerun the file at Friday's close before the offer goes in: the deal calculator takes the exit rate as an input and the DSCR calculator takes the takeout rate, so repricing against a 5.17% ten-year is a two-minute job rather than an argument with a seller. Whatever number comes out of that is the number that goes on the contract, and if the seller will not meet it, the next listing is one of thirty-eight thousand.

Sources

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.

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