Mortgage Rates Hit 7.50%: 54 Cities Falling, No Crash Yet

The 30 year fixed mortgage rate just hit 7.50%. That printed on Mortgage News Daily on September 28, and it is the highest rate since April 30, 2024. I have a 6.99% loan on one of my investment properties. I wanted to refinance it. I waited, rates took off, and now I am stuck. If you are stuck too, you are not alone. In this article I break down why rates keep climbing, what 7.50% costs you every month, which cities are already falling, and why I still do not call this a national crash.

The number today: 7.50%

Rates keep going higher and higher. Here is where things stand right now.

• 7.50% on the 30 year fixed, Mortgage News Daily, September 28. That is the highest since April 30, 2024.
• 7.03% in the Freddie Mac weekly survey for September 24, up from 6.95% the week before.
• 5.21% on the 10 year Treasury yield, which hit 19 year highs in September.

Look at the 52 week range. The 30 year went from a low of 5.99% to a high of 7.50%. That is a full 1.5 points in under a year. One year ago Freddie Mac had the 30 year at 6.30%. The 15 year went from 5.49% to 6.42%.

Mortgage News Daily said rates bounced back up Monday even after a Friday bond rally. Strong data and a heavy supply of Treasury bonds mean there is no relief in sight. As the 10 year gets above 5%, I think the markets should be nervous.

Why the Fed just hiked again

On September 16, the Fed raised its target range by a quarter point to 3.75% to 4.00%. The vote was 12 to 0. Everyone agreed.

Chair Kevin Warsh said inflation is too high and has been for too long. I agree with him on that. Inflation has been above the Fed’s 2% target for six years now. August core CPI came in at 0.3% for the month, hotter than expected. The Fed’s own projection has core PCE at 3.4% for 2026. The target is 2%.

Now look at the dot plot. I call it the Fed’s crystal ball. 16 of the 19 Fed officials see at least one more hike before the end of 2026. The median projection for the fed funds rate at the end of 2026 is 4.1%. Today the midpoint of the range is 3.88%. So the Fed is telling us more hikes could be coming, and that should keep pressure on the 10 year.

What 7.50% costs you every month

I ran the numbers on a $429,100 home, which is the NAR median price for August. I used 20% down and a 30 year fixed loan, and I counted principal and interest only.

• At 5.99%, the 52 week low, the payment is $2,056.
• At 6.30%, where rates were one year ago, it is $2,125.
• At 7.03%, the Freddie Mac rate now, it is $2,291.
• At 7.50%, the Mortgage News Daily rate today, it is $2,400.

That is $275 more per month than one year ago on the same house. It is about $3,300 a year that goes to interest instead of your pocket. Against the 52 week low it is $344 more every month. Redfin puts the median monthly payment at $2,633, up 3.4% year over year.

You are paying more for the exact same asset. And here is the part that scares me. Some homes are only going up about 1% a year, while inflation is running around 3.7%. That means the equity in your home is losing buying power. You cannot refinance your way out, because refinancing today means taking one of these high rates.

Buyers are walking away

Existing home sales fell to a 3.98 million annual pace in August. That is down 2.0% from July and down 1.2% from a year ago. This happened in the summer, which is when people usually move.

Redfin pending sales for the four weeks ending September 13 are at a three year low. They are down 5.4% year over year, and down 3.5% in a single week. Homes sat for 31 days on average in August according to NAR. Redfin has it at 46 days, flat from last year.

Here is how August sales changed from July by region:

• West: 0.0%
• South: down 1.6%
• Midwest: down 3.1%
• Northeast: down 4.0%

NAR Chief Economist Lawrence Yun summed it up. He said mortgage rates and home sales move in opposite directions, so a mild dip in buying due to high rates is not surprising.

Inventory is piling up

20.8% of listings have had a price cut, up from 19.7% a month earlier, according to Redfin. I have a strong feeling that number keeps rising as rates climb.

• Supply is 4.9 months, with 1.62 million homes for sale, according to NAR. Redfin counts 1.50 million active listings, up 1.5% from a year ago.
• Sellers are blinking. One in five listings cuts its price. The sale to list ratio is 98.6%, and only 25.1% of homes sold above asking.
• New listings are drying up too. They came in at 363,298, down 0.5% for the week. Sellers with 3% mortgages are not moving, and that puts a floor under prices.

4.9 months is the healthiest supply buyers have seen in years. Redfin has it at 4.1 months. But if buyers cannot afford homes and supply keeps coming, the market gets oversupplied. That is when prices start to drop. I think this turns into a buyer’s market before long.

I have seen this movie before. I bought a big property in Florida during the 2008 to 2010 recession with an all cash offer. My real estate agent told me there was no way the seller would take it. I told her to send it anyway, and that it was a yes or no with no counters. They said yes. It happened the very month the market hit bottom, and it became one of my best investments ever. When rates are high, cash buyers get to make demands.

Prices: not a national crash, yet

So far, national prices are holding up.

• The NAR median price in August was $429,100, up 1.6% from a year ago.
• The Zillow Home Value Index is up 1.3% year over year.
• The Redfin median sale price is $397,633, up 2% year over year.

The regional gap is huge. NAR’s August median price was $340,400 in the Midwest, $366,500 in the South, $556,900 in the Northeast and $619,100 in the West.

Why have prices not broken? Distressed sales are only 2% of the market. Cash buyers are 27% of sales, and first time buyers are 30%. Sellers locked into 3% loans are not selling. And Freddie Mac still calls it a solid labor market.

I am one of those locked in owners. I have about a 3.4% loan on one property and the 6.99% loan on another. I had to pay cash for a third property. I planned to put a mortgage on it later, then rates jumped, so I am stuck there too.

54 cities are already falling

This is not one national market. Some zones are getting hammered and some are still running. 54 of the 300 largest metros have prices down year over year. That is 18%.

• Austin, Texas is 27.6% below its 2022 peak. Imagine buying there at the top.
• Hartford, Connecticut is 29.0% above its 2022 peak. If you own in Hartford, you are loving life.

The falling group is the Sun Belt and the Mountain West. Texas, Florida and Colorado are leading the corrections. Inventory there is above 2019 levels, prices ran past local incomes during the pandemic, and builder incentives on new homes pull buyers away from resale homes.

The holding group is the Northeast and the Midwest. Inventory there is still below 2019 levels, there was less overbuilding, and prices are still rising slowly. The rule I use is simple: compare inventory to 2019.

I see this in my own properties. One of mine is in an area where they do not build. When old homes come down, they do not get rebuilt, or a business buys the lots. People still need homes, so values there keep going up. Some of my other properties that I thought would run to the moon have been pretty flat.

Crash or correction? My scorecard

Here is what a real crash needs, and why I do not see it yet:

• Forced sellers: distressed sales are only 2% of the market.
• Credit stress: cash buyers are 27% and first time buyers are 30%.
• Job losses: Freddie Mac described a solid labor market on September 24.
• Sellers dumping homes: new listings are falling, and 3% mortgages keep owners in place.
• National prices down: they are actually up 1.3% to 1.6% year over year.

And here is what is cracking right now:

• 7.50% mortgage rates, the highest since April 2024.
• A Fed that is still hiking, with 16 of 19 officials seeing one more hike in 2026.
• Pending sales near a three year low, down 5.4% year over year.
• 20.8% of listings with price cuts, and climbing.
• 54 of 300 metros already down, with Austin off 27.6%.

My read is that this is a regional, rate driven correction. It is not 2008. The Fed decides whether it spreads. I think we are at the beginning stages, which is why I keep covering it.

The dates that decide it

• Every Thursday: the Freddie Mac weekly rate. I am watching to see if it holds above 7%.
• About October 22: NAR September existing home sales. A number below 3.9 million means the correction is spreading.
• October 28: the next Fed decision. Will they hike in October or wait until December?
• December 9: the last Fed meeting of 2026, with a new dot plot.
• The 10 year Treasury at 5.21%: my line in the sand is 5.25%. If it breaks and holds above that, I think mortgage rates head toward 7.75%.

That 5.99% from earlier this year is looking like gold now.

My playbook for buyers, sellers and investors

Buyers: you have leverage for the first time in four years. 20.8% of sellers have already cut, and I think that number goes higher. Ask for closing costs and a rate buydown. Buy the house, date the rate, and refinance later if rates come down.

Sellers: price ahead of the market, not behind it. You will not get what you could have asked a year ago, and overpricing just sends buyers away. In the Sun Belt, do not wait for spring. In the Northeast and Midwest, you still have some pricing power. Days on market of 31 to 46 is the tell. If your home is sitting, the price is wrong.

Investors: rate sensitive stocks feel this first. That includes homebuilders, lenders, mortgage REITs and home improvement names. I am watching them into the October 28 Fed meeting. Right now, the 10 year Treasury yield is the most important number in America.

Keep reading on Stock Moe

• Housing Market Update: 7% Mortgages and Record Seller Concessions
• My 10 Year Mortgage Rate Forecast: 6.6% in 2027, 6.1% by 2031
• Mortgage Rates Hit 7.45%: What Changed and What It Costs You

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Sources

• Mortgage News Daily, 30 year fixed rate, September 28, 2026
• Freddie Mac Primary Mortgage Market Survey, September 24, 2026
• Federal Reserve FOMC statement, September 16, 2026, and Charles Schwab FOMC recap (dot plot, Warsh quote)
• National Association of Realtors existing home sales, August 2026 (released September 10)
• Redfin Housing Market Update, four weeks ending September 13, 2026
• Zillow Home Value Index via ResiClub, September 2026
• ResiClub Analytics, September 2026, Zillow Home Value Index August 2026 data
• Federal Reserve 2026 meeting calendar

I am not a financial advisor and nothing in this article is financial advice. Everything here is my own opinion, for educational and entertainment purposes only. Do your own research and talk to a licensed professional before you make any financial decision.