Mortgage rates are approaching 7% – here’s why

80 days

There are 80 days between Labor Day (next Monday) and Thanksgiving. That’s 11 weeks and 3 days.

Labor Day weekend is a turning point in the year. Starting Tuesday, you have 80 days to absolutely crush it before the market slows for the holidays and your buyers head out of town.

This hasn’t been an easy year. Deal volume is low. But there are still buyers out there, and they need our help finding homes.

So let’s make these 80 days count.

Scroll down to today’s Foundation Plans, where I give you some practical tips to help you stay focused, stay disciplined, and put yourself in the best position to finish the year strong.

It’s go time, friends!

- David

Mortgage rates are approaching 7%

Mortgage rates are creeping back toward 7% territory, with 30-year rates hitting 6.91% Wednesday, up from 6.75% just a week earlier, according to Mortgage News Daily (MND). 

Here are the key points to know:

• Rates are climbing fast. The 30-year mortgage rate jumped from 6.75% to 6.91% in just one week, while the 10-year Treasury yield hit a 20-month high.

• Middle East tensions are fueling the spike. Renewed military strikes have pushed oil prices — and inflation fears — higher, rattling the bond market.

• The Fed may hike rates on Sept. 15-16. Fed Governor Michael Barr signaled the central bank "should act decisively to raise rates" if inflation doesn't cool, and markets now put the odds of a quarter-point hike at 62.3%.

• Inflation is still running hot. The Fed's preferred gauge showed prices up 3.7% year-over-year in July (3.3% core), with the next inflation report due Sept. 11 — just days before the Fed's meeting.

My take

While MND’s daily index rose into the 6.9's today for the first time in more than a year, many borrowers are already seeing rates at 7% or higher — a sign the market is bracing for inflation to stick around, and the Fed knows it. A hike this month would be a short-term gut punch for buyers already priced out, but the alternative — letting inflation simmer — would be worse for housing long-term. The "rates are coming down" narrative from earlier this year just took a serious hit. As we've been saying for a while now, agents should prepare for rates to remain elevated through the rest of 2026 and into 2027.

Pending home sales fall, ending 8-month streak of gains

Pending home sales just snapped an eight-month winning streak, falling 0.2% year-over-year in August — the first annual decline since last November, according to Realtor.com’s latest market update. 

Here are the main takeaways from the report:

• The streak is over: Pending sales turned negative (-0.2% YoY) for the first time since November, down from a May peak of +4.8%, while new contract signings fell 3.4% year-over-year.

• Rates are the culprit: Mortgage rates climbed for a sixth straight month, from 6.05% in February to 6.67% in August — and are now running about 10 basis points above year-ago levels, a sharp reversal from June's 30-point advantage.

• Price cuts finally caught up: 20.4% of listings saw a price reduction in August, matching last year's rate for the first time in 2026 after trailing it all spring — with the Midwest leading the shift (all 10 metros saw more cuts than in July).

• But sellers aren't panicking: Delistings remain 12.6% below last year's pace with no late-summer spike, and the "quit rate" has held steady around 5.5% for six weeks — a sign the market hasn't stalled the way it did in 2025.

• Prices keep easing, gently: The median list price fell to $424,500, down 1.3% YoY — the 10th straight monthly decline, though the drop has roughly halved from July's pace.

• Inventory is growing again: Active listings rose 3.6% YoY to 1.14 million, the fastest growth so far this year, though levels remain 11.1% below pre-pandemic norms.

• Watch the Midwest and Northeast: Both regions are seeing rising inventory (+10.5% and +9.1% YoY) and above-average price-cut growth, making them the ones to track heading into fall.

My take

What’s important here is that the market is cooling in a controlled way. Last year’s “Cruel Summer” was defined by sellers pulling listings when buyers wouldn’t budge. This year, sellers are absorbing the pain through price cuts instead, allowing inventory to keep building — a healthier adjustment even if the topline numbers look similar. The thing to watch now is whether the Midwest and Northeast’s rise in price cuts spreads to other markets. That could determine whether this remains an orderly cooldown or turns into another prolonged stalemate.

The best markets to buy new construction homes right now

Of the 100 top metros in the country, Realtor.com just dropped its second annual ranking of the best ones for new construction, and the South is dominating.

Eight of the top 10 spots went to Southern metros, with the Carolinas alone claiming six. Charleston, SC took the top spot, thanks largely to new homes listing 12.2% below resale prices ($443,273 vs. $504,832), and it's one of four metros in the top 10 where new construction is actually cheaper than buying existing.

Here are the top 10 metros for new construction:

1. Charleston, SC

2. Greenville, SC

3. Boise City, ID

4. Charlotte, NC

5. Nashville, TN

6. Chattanooga, TN

7. Winston-Salem, NC

8. Madison, WI

9. Durham, NC

10. Columbia, SC

My take

The real story isn't that the South is building more. It's that Southern builders are pulling off something rare: new construction that's actually cheaper than existing homes, inverting the usual "new means premium" math. That's only possible where land is cheap and zoning doesn't fight builders at every turn — which is also exactly why the Northeast doesn't crack the top 10. For agents in these markets, new construction may be one of the best affordability opportunities you can put in front of buyers right now.

Schematics

The news that just missed the cut

• Finding an assumable loan just got harder – Roam is closing down

• How to get more referrals without spending more on marketing

• The 3 hires every agent needs to make to scale their business

• How these Gen Z workers bought a home in their early 20s

• Use these scripts for any lead, any time

Foundation Plans

Advice from David to win the day

With only four months left in the year, every day matters. There are only so many hours in the week, and how you use them will determine how strong you’ll finish 2026. 

In today’s edition, I’ll share some practical strategies that have helped me master my time and productivity. I’ll also link to concrete examples of how successful agents design their schedules to stay consistent, focused, and results-driven.

Preparation is key – You don’t want to wake up and say, “What am I doing today?” You want to eliminate any anxiety and uncertainty about the week. Make sure you know what you’re going to do each day, and have a plan of attack ready BEFORE the day, or even the week, begins. We recommend spending an hour every Sunday night reviewing your past week and previewing the next one. Ask yourself questions about the previous week. Who did I talk to? How was my sales activity? Who did I meet? Who needs to be in my CRM? Then ask questions about this week. Who are my hottest targets? Who am I trying to meet? What family/personal stuff is on my agenda? Basically, use the past to plan for the future.

Block your time and batch your activities – Once you’ve decided what you’re going to do each day, we recommend blocking your time and batching your activities. For example, give yourself a two- or three-hour block on Wednesday to farm an area or make all your follow-up calls. Also, batch your activities. Instead of writing an offer letter one minute and then making a follow-up phone call the next, group similar activities so you get into a rhythm and flow. You’ll be more effective that way. 

Hold yourself accountable – Each Monday, every member of our team, including me, meets to discuss what we did in the past week. How many sales did we close? How many new contacts did we make? How many pending sales are in the pipeline? How close are we to hitting our revenue goals? If you don’t have a team, get yourself a mentor or a person you trust and meet with them in person or via video. Make it a non-negotiable. The meeting doesn’t have to be long. Just enough to make sure you are staying on track. 

Concrete examples – Finally, to see how agents actually structure their day to be highly productive, read this and this. 

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

Don’t let events or other people set your agenda. Stay ruthlessly focused on your goals — your time is limited, and you only get one life. Make the most of it. Have a wonderful week.

We’ll see you back here on Friday!

- David