Fed hikes interest rates for the first time since 2023

Plus: UWM says VantageScore 4.0 improves credit for 25% of borrowers

September 18, 2026

🥱 Finally, Friday! Today’s newsletter is 721 words, a 2.5-minute read. Let’s dive in…

Disclaimer: Average mortgage rates as of September 17, 2026. © MND Daily Rate Index.

1. Fed hikes interest rates for the first time since 2023

Despite protestations from President Trump, the Federal Reserve raised its benchmark interest rate 25 basis points to 3.75%-4% on Wednesday, its first hike since July 2023. The decision was unanimous, as the Fed seeks to bring persistent inflation back toward its 2% target.

The Fed’s updated projections point to the possibility of another hike later this year. Officials now expect headline inflation to reach 3.7% in 2026, up from the 3.6% estimate in June, while the unemployment rate is projected at 4.1%.

The move could add pressure to real estate, where higher borrowing costs have already weighed on activity. For buyers, sellers and investors, another hike could mean higher-for-longer financing costs and continued pressure on affordability and commercial transactions.

2. UWM says VantageScore 4.0 improves credit for 25% of borrowers

UWM says roughly 25% of borrowers get a more favorable credit outcome when scored with VantageScore 4.0 instead of traditional FICO, and expects that share to climb to 40% by the end of September.

About $8.6 billion in loans have used VantageScore since rollout began, with UWM and Rocket Mortgage accounting for roughly 98% of that volume. Other lenders, including AmeriSave and Pennymac, have moved more slowly amid technology and implementation hurdles.

For mortgage brokers using UWM, the company says the new scoring model has already helped some borrowers qualify for better terms — and in some cases could turn an otherwise declined application into an approved loan.

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3. More Nuggets

📈 Mortgage applications fall 4% as rates near 7%. (MBA)

💻 FirstClose launches Lender Portal for home equity leads. (FirstClose)

🏛️ Senate committee advances Brian Johnson for CFPB director. (Reuters)

🤝 Gateway First Bank to acquire Colonial Savings. (Gateway)

🏗️ New home construction permits hit a post-pandemic low. (Zillow)

🚨 Coach’s Corner

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4. Pennymac and UWM raise conforming loan limits

Pennymac and UWM have raised their conforming loan limits ahead of the FHFA's expected 2027 update, giving borrowers access to larger conventional loans sooner.

  • Pennymac set its one-unit limit at $850,000 — above the $845,000 mark adopted by at least eight other lenders, including Rocket Mortgage and CrossCountry Mortgage — while UWM raised its limit to $847,440, up from the current $832,750 baseline.

Both lenders also raised limits for two- to four-unit properties, with Pennymac reaching $1,634,950 for four-unit homes and UWM reaching $1,630,005. The new limits are effective immediately across both lenders' channels.

5. Foreclosure filings rise 13%

Foreclosure filings hit 40,277 properties in August, up 13% year-over-year and 1% from July, according to ATTOM. Foreclosure starts rose 7% annually to 25,894, though they slipped 3% month-over-month — Florida led with 3,189 starts, followed by Texas at 3,126.

Lenders repossessed 5,794 properties, up 22% from July and 42% year-over-year, a pace well outstripping the rise in filings and starts.

Texas led REOs with 1,835, and Houston, Dallas and San Antonio topped the metro rankings with 448, 402 and 256 completed foreclosures, respectively.

“August’s data shows that foreclosure activity continues to trend above year-ago levels, particularly in completed foreclosures, which saw a notable annual increase,” said Rob Barber, ATTOM CEO. “While some homeowners are still facing financial challenges, overall foreclosure volumes remain well below historical norms and the broader housing market continues to demonstrate resilience.”

☀️ You’re all caught up. See you on Monday!

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