Homeownership 101

Will the housing market crash? And are 7 percent rates as bad as they sound?

Jeff Updike & Weston Pugh · Dave Perry-Miller Real Estate · Updated October 2026

Two headlines come up at every dinner this fall: mortgage rates are back over 7 percent, and the crash is coming. We checked both against the data. The first is real, but overblown. The second is clickbait.

Here is what is true in each headline, what is missing from it, how today compares with the run-up to 2009, and what is actually worth watching if you own a home or plan to buy one in Dallas.

From the show. This page expands the Homeownership 101 segment of Episode 359 of SOLD with Updike Pugh, published 2 October 2026. The video below starts at that segment.

SOLD with Updike Pugh, Episode 359: Homeownership 101, clickbait or real?

The verdicts at a glance

Headline	Verdict	Why
“Rates are at 7 percent”	Real, but overblown	Highest since January 2025, but below the long-run average of about 7.7 percent
“The crash is coming”	Clickbait	Foreclosure starts are rising from a low base, and the loans and thin equity behind 2009 are not back

Headline one: “Rates are at 7 percent”

What is true

Freddie Mac’s average 30-year fixed rate was 7.03 percent on 24 September 2026, up from 6.95 a week earlier and 6.30 a year earlier. It was the first reading over 7 percent since January 2025, and the rate kept climbing, to 7.40 percent on 8 October.¹ You will see higher numbers online. Those usually come from daily lender surveys; Freddie Mac’s weekly average is the benchmark to compare against.

The Federal Reserve raised its benchmark range a quarter point on 16 September, to 3.75 to 4 percent, and the median projection from its own officials shows no cuts through 2027. The next meetings are 27 and 28 October and 8 and 9 December.² The Fed does not set mortgage rates directly, but if you are waiting for it to bring them down, it is not promising to.

What the headline leaves out

30-year fixed, Freddie Mac	Rate	Payment on $400,000
Record low, January 2021	2.65%	$1,612
A year ago	6.30%	$2,476
24 September 2026	7.03%	$2,669
8 October 2026	7.40%	$2,770
Average since 1971	about 7.7%	$2,855
Peak, October 1981	about 18.6%	–

Rates from Freddie Mac’s Primary Mortgage Market Survey.¹ Payments are our calculation: principal and interest only on a 30-year, $400,000 loan, before taxes, insurance and HOA dues.

Seven percent feels like a disaster if you are comparing it with 3 percent. But the 3 percent era was the exception, held down by emergency policy, and today’s rate is still below the average of the last 55 years. Against a year ago, the same $400,000 loan costs about $200 to $300 more a month. That is real money, and it is why buyers are negotiating harder, not a sign that housing has broken.

The adjustable-rate question

More buyers are choosing adjustable-rate mortgages. ARMs were 9.8 percent of applications in the week reported on 23 September, up from 8.4 percent.³ That worries people who remember 2008, but today’s ARMs are a different product. Most are fixed for the first five, seven or ten years and have caps on how high the rate can go. Before the crash, many subprime loans carried teaser rates that reset after two or three years, with little room to absorb the jump.

The cost of sitting out

The average homeowner with a mortgage has about $310,000 in equity, and most of it came from the home going up in value.⁴ Waiting for a lower rate has a price too: whatever the home you want gains in the meantime. A lower rate may be available to refinance into later, though refinancing has costs and is never guaranteed. A purchase price, once it has moved, does not come back. For the long-run math, see what waiting to buy really costs.

You can try to refinance a rate later. You cannot buy at yesterday’s price.

Headline two: “The crash is coming”

Where the worry comes from

This one took off when an agent predicted on TikTok that there would be more foreclosures than home sales in 2027. There are soft spots behind the worry. Foreclosure starts rose 18 percent nationally in the first half of 2026, to 164,566.⁵ Loans made since 2022 were 39 percent of foreclosure starts in May, the highest share yet. Many are FHA loans with as little as 3.5 percent down, taken out after rates rose, so those owners have little equity to fall back on.⁶

A foreclosure start is a legal notice filed after missed payments. It is not the loss of a home. An owner with equity can usually sell before it gets that far, and that is exactly what most owners have today.

The local picture

Dallas-Fort Worth is averaging a little over 800 foreclosure starts a month, up about 24 percent. In 2015, a calm year, the area averaged more than 1,000 a month. About 47 percent of mortgaged homes in DFW are equity rich, meaning the loan is no more than half the home’s value.⁷ Foreclosures are up from almost nothing, and they are still below a normal year.

2009 compared with today

Ingredient	Before the 2009 crash	Today
Subprime share of new mortgages	More than 20% (2006)8	About 6.5%, roughly 1 in 15 (2025)8
Risky loan types	Interest-only, option ARM and balloon loans grew from 7% to 29% of the market9	ARMs about 1 in 10 applications, mostly fixed for 5 to 10 years3
Owners with a low rate locked in	–	About half of mortgages under 4%; about 1 in 5 at 6% or more10
Owners underwater	About 23% (2009)11	About 2.1%, roughly 1 in 504
Homeowner equity	–	About $35.8 trillion12

The 2009 crash was built on loans that should never have been made, to buyers with no cushion, and a wave of forced sales pushed prices down for everyone else. None of those ingredients is back. Prices are softening in some places and foreclosure starts are climbing, but a crash needs owners who cannot pay and cannot sell. Today’s owners mostly have low fixed rates and a lot of equity.

Today’s equity is a cushion, not a cliff.

What is actually worth watching

If you are worried about your home, look at your carrying costs, not the crash headlines. The Dallas Fed found the median Texas homeowners insurance premium rose 60 percent from 2019 to 2024, double the 30 percent national increase.¹³ Property taxes are the other big line. Two steps help:

• Shop your homeowners policy at renewal, and ask what a higher deductible would save.
• Make sure your homestead exemption is filed. The school homestead exemption is now $140,000, with an extra $60,000 for owners 65 or older or disabled.¹⁴

How to read the next scary headline

• Find the source. A weekly Freddie Mac rate and a daily lender quote are not the same number.
• Look for the base. “Up 24 percent” means little until you know what it is up from.
• Check the time frame. One month in one ZIP code can swing hard on a few sales; look at three to six months.
• Ask what is local. National headlines average together very different markets. Dallas is not Austin, and a condo is not a house.

In 75206, for example, sellers got 97.6 percent of their original asking price in August with rates above 7 percent, and the summer median price was up 6.7 percent from a year earlier.¹⁵ That is not a market in a crash. For your own ZIP code, see Market Watch, and for who has the leverage right now, is it a buyer’s market.

What it means for you

If you are buying

Get fully approved at today’s rate and buy a payment you are comfortable with now, not one that only works after a refinance. If you look at an ARM, ask how long the rate is fixed and what the caps are. You have more choice and more room to negotiate than you did a few years ago.

If you are selling

Buyers are paying attention to rates, so price to the market you are in, not the one from 2022. Well-priced homes are still selling close to their asking price. Seller concessions toward a rate buydown can help; see how seller concessions work.

If you own and are staying put

Your low rate and your equity are your protection. Spend your worry on the insurance renewal and the tax bill instead.

Quick answers

Our opinion: Our Take: Is a housing crash coming to Dallas?

Market figures are as of the dates stated and change monthly; mortgage rates change weekly. Nothing here is a valuation of a specific property or a forecast of prices. This is general information, not lending or financial advice; talk with a lender about your own loan. Jeff Updike and Weston Pugh are licensed Texas real estate agents with Dave Perry-Miller Real Estate. Equal Housing Opportunity.