Kiavi Investor Pulse: September 2026 Market and Financing Update

The September 2026 real estate market delivered the Federal Reserve's first rate hike since 2023, a 30-year mortgage rate above 7%, and a new chapter for Kiavi as a Figure company. Higher rates may slow retail buyers, but that same pullback could hand real estate investors more inventory than at any point in the past decade, more room to negotiate, and fewer competing investor buyers. Completed foreclosures rose 42% year-over-year in August and Midwest rents led the nation, two signals that may favor disciplined acquisition and rental hold strategies.

Key Takeaways

Figure completed its acquisition of Kiavi on September 1, 2026.
The Fed hiked rates to 3.75-4%, and the 30-year fixed reached 7.03%.
Inventory reached a 4.9-month supply, its highest level in over a decade.
REOs jumped 42% year-over-year in August, which may widen distressed deal flow.
Midwest rents rose 2% year-over-year, leading every U.S. region.

What Does the Fed's Rate Hike Mean for Your Next Deal?

The Fed raised rates to 3.75-4% on September 16. The 30-year fixed reached 7.03% by September 24.

The hike itself was partially anticipated, so the bigger signal may be the outlook: 16 of 18 officials who submitted forecasts see at least one more increase this year, with a median year-end projection of 4.1%, according to Connect Money's analysis. Conventional mortgage rates tend to follow the 10-year Treasury, which crossed 5% ahead of the meeting, and the 30-year fixed averaged 7.03% as of September 24, up from 6.30% a year earlier, per Freddie Mac.

How 7% conventional rates may play out depends on where you sit in a deal:

If You're...	What 7% Conventional Rates May Mean
Selling a flip	A smaller qualified buyer pool at entry and mid-price tiers, so pricing may need to reflect today's affordability
Buying a project	Fewer competing retail buyers and more room to negotiate on price
Holding a rental	Higher ownership costs could keep more households renting

Source: Kiavi, September 2026

Kiavi Tip: Run your exit at today's buyer rates, not the rates in place when you acquired. A deal that still pencils at 7% likely has room to absorb a slower sale.

Where Is Distressed Deal Flow Building?

REOs rose 42% year-over-year in August. Total foreclosure filings rose 13%.

Bank-owned inventory may be where the most immediate opportunity sits this fall. Lenders repossessed 5,794 properties in August, up 22% from July, even as foreclosure starts dipped 3% for the month, according to ATTOM's August 2026 report. That combination could put more homes on the REO (Real Estate Owned) market in the coming months, and because ATTOM noted overall volumes remain below pre-pandemic norms, the trend reads more like a normalizing market than a wave of distress.

South Carolina posted the highest foreclosure rate in August, followed by four other states with notably elevated activity:

South Carolina: one in every 1,547 housing units
Nevada: one in every 1,920 housing units
Florida: one in every 2,397 housing units
Texas: one in every 2,445 housing units
Maryland: one in every 2,530 housing units

Florida and Texas were also among the regions where more surveyed flippers sold below ARV than above in Q2, so REOs there may call for a more conservative exit price.

Kiavi Tip: Before bidding on an REO, run it through the ARV and cash to close estimator to see whether the deal still works at a softer exit price.

Why Could Rising Inventory Work in Your Favor?

Inventory reached a 4.9-month supply in August, the highest in over a decade.

More listings and slower sales tend to shift leverage toward buyers, and for fix-and-flip investors sourcing their next project, that could mean better entry pricing. Existing-home sales slowed to a 3.98 million annual pace while inventory rose to 1.62 million units, per NAR, and Redfin put median days on market at 50. Competition for those listings eased as well, with individual real estate investors and second-home buyers accounting for 15% of August sales, down from 21% a year earlier.

Region	Median Existing-Home Price (August 2026)	Year-Over-Year Change
Northeast	$556,900	+4.3%
Midwest	$340,400	+3.3%
South	$366,500	+0.7%
West	$619,100	-0.2%
National	$429,100	+1.6%

Source: National Association of Realtors, September 2026

Steady appreciation in the Northeast and Midwest may support firmer exits there, while flatter pricing in the South and West could reward buying at a discount rather than counting on appreciation. The latest fix-and-flip survey points to a similar picture of a market that is slowing but still expanding.

What the Latest Fix and Flip Survey Shows

The Burns + Kiavi Fix and Flip Market Index read 59 in Q2 2026, down from 63 but above the 50 expansion line for a sixth straight quarter and above the 57 reading a year earlier.

Survey Metric	Q1 2026	Q2 2026
Fix and Flip Market Index	63	59
Share selling mostly below ARV	17%	21%
Average renovation spend per flip	$79K	$69K

Source: JBREC and Kiavi Fix and Flip Survey, August 2026

Average renovation spend fell by $10K per flip, which could help offset slower exits, even as strong demand for skilled trades keeps contractor schedules tight. In Kiavi's lending experience, slower sales tend to show up first as extension requests and refinances into rental loans rather than missed payments, so flagging a slow exit early may keep more options open.

Kiavi Tip: A comps-backed ARV and a line-item budget may matter more than ever, and the most common reasons bridge loan applications get denied make a useful pre-offer checklist.

Why Are Midwest Rents Leading in 2026?

Midwest apartment rents rose 2% year-over-year through August, leading all U.S. regions.

Rental fundamentals appear to be firming. Apartment rents have posted a monthly gain in every month of 2026, occupancy held at 95.5% in August, and annual new supply has dipped below the decade average for the first time in about three years, according to RealPage. With supply more manageable than in the Sun Belt, the Midwest may offer the clearest cash-flow case for a rental hold.

Market	Annual Rent Change (Year Ending August 2026)
Milwaukee	+5.1%
Chicago	+2.6%
Cleveland	+2.4%
Detroit and St. Louis	+2.3%
U.S. national	+0.9%
Charlotte, Tampa, Houston	Roughly -2%
San Antonio	-3.7%

Source: RealPage Market Analytics, September 2026

The South is still absorbing heavy new supply, so rental holds there may need more conservative rent assumptions, though RealPage expects moderating development to help rebalance those markets over time. Because RealPage tracks multifamily apartments, single-family rents in your specific zip code may tell a slightly different story.

Timing may matter as much as location heading into fall. Leasing demand typically softens once the school year starts, so timing lease renewals to the school calendar could help you avoid an off-season vacancy. If small multi-family is on your list, the choice often comes down to how financing a 2-4 unit property works across bridge and DSCR options.

Kiavi Tip: If a Midwest flip isn't clearing at your target price, model a buy-and-hold strategy on current local rents before cutting the list price.

What Does Kiavi Becoming a Figure Company Mean?

Figure Technology Solutions completed its acquisition of Kiavi on September 1, 2026.

Kiavi is now a Figure company, per Kiavi's official announcement. Figure CEO Michael Tannenbaum described the deal as adding an express lane for the next generation of credit, bringing Kiavi's lending technology into Figure's capital markets platform. For real estate investors, that combination could open broader access to Kiavi's financing over time.

What Are Lenders Watching in DSCR and Fix-and-Flip Financing?

DSCR and fix-and-flip financing are getting more competitive in 2026, and Kiavi's perspective in September trade coverage pointed to a few themes that could be useful for your next deal. As Charles Goodwin, Head of Bridge and DSCR Lending, put it to Mortgage Professional America, "A flat market is a market that you can operate in."

DSCR pricing is converging, so speed and certainty may matter as much as rate (National Mortgage Professional).
DSCR underwriting varies by lender, so ask how rent, documents, and rate locks are handled (Mortgage Professional America).
A few trusted lender relationships may close more deals than shopping dozens (Mortgage Professional America).
On a fixer-upper, run the numbers and inspect major systems before falling for the vision (Mortgage Research Network).

Final Thoughts

Higher rates and a slower sales pace may test exit assumptions this fall, but they could also create the kind of market disciplined real estate investors tend to do well in: more inventory, less competition, growing REO supply, and steady Midwest rent growth. The deals that still pencil at 7% rates may be the strongest ones to pursue. As a Figure company, Kiavi is focused on building what's next alongside the real estate investors it serves.

Ready to run the numbers? Price out a loan with Kiavi.

Frequently Asked Questions

Frequently Asked Questions (FAQs) About the September 2026 Real Estate Market

Common questions about the September 2026 real estate market, covering the John Burns Research and Consulting + Kiavi Fix and Flip Market Index (FFMI), the Fed's rate hike, rising foreclosure activity, the strongest rental and flip markets, and what Kiavi becoming a Figure company may mean for borrowers.

The Burns + Kiavi Fix and Flip Housing Market Index (FFMI)™ is a diffusion index produced by John Burns Research and Consulting in partnership with Kiavi, based on a proprietary quarterly survey of roughly 275 active flippers that measures current sales, expected sales, and availability of pre-flip homes against seasonal norms. Readings above 50 indicate expansion. The index read 59 in Q2 2026, and the Q3 reading is scheduled to be published in November.

The Fed's September 16 increase to a 3.75-4% target range may keep short-term borrowing costs elevated through the rest of 2026, and with 16 of 18 officials who submitted forecasts projecting at least one more hike this year, real estate investors could see financing and buyer-affordability pressure persist into 2027. Conventional mortgage rates, which tend to track longer-term Treasury yields, averaged 7.03% by September 24, per Freddie Mac. For fix-and-flip investors, that could mean a smaller qualified buyer pool at exit, so conservative sale price assumptions may matter more than usual.

Rising foreclosure activity could expand bank-owned inventory for real estate investors who run distressed acquisition strategies, since completed foreclosures (REOs) jumped 42% year-over-year to 5,794 properties in August 2026 while total filings rose 13%, according to ATTOM's latest monthly report. Starts dipped 3% from July, which may suggest the near-term opportunity sits more in REOs than in a growing pre-foreclosure pipeline. Volumes remain below pre-pandemic norms, so the trend may reflect normalization rather than broad distress.

The Midwest may offer some of the most balanced conditions for both strategies right now, with the region leading U.S. apartment rent growth at 2% year-over-year through August, per RealPage, while Midwest existing-home prices rose 3.3% annually and held the lowest regional median at $340,400, per NAR. Northern California and the Midwest were also the only regions in the Q2 2026 JBREC survey where more flippers beat ARV than missed it. A quick screen like the 70% rule for house flipping could help test a deal in any of these markets before committing.

Figure Technology Solutions acquired Kiavi, a technology-powered non-bank lender to real estate investors, closing the deal on September 1, 2026, and Kiavi is now a Figure company, a move Figure CEO Michael Tannenbaum described as adding an express lane for the next generation of credit. Kiavi CEO Arvind Mohan joined Figure as Chief Business Officer to lead the rollout of Kiavi's lending platform across Figure's ecosystem. For real estate investors, joining Figure could broaden access to Kiavi's bridge, DSCR, and new construction financing over time.