Mortgage rate jumps to 7.28% as McAllen sits on 8.9 months of homes for sale

The average U.S. 30 year mortgage rate jumped a quarter point to 7.28% in the week of Oct 1, landing on a Valley housing market that already had plenty of homes for sale. The McAllen metro had 8.9 months of supply in July, well above the 5.5 months for Texas as a whole.

A new entry level house started without a buyer in Hidalgo County is now a bet against buyers who can afford to wait, and competing for those buyers is getting expensive. Hakes Brothers is advertising a 4.75% fixed rate, more than two and a half points under the national average.

Permits and starts

Housing permits in the McAllen metro fell for a second straight month in August, to 431 across all home types from 506 in July and 744 in June. No September count was out by Oct 2 for the metro, Hidalgo County, Brownsville or Harlingen, so Harlingen’s August report, with 38 homes for the month and 219 for the year, remains the only firm city count in Cameron County.

The new commercial work in Hidalgo County comes down to two state registrations dated Sep 25, worth $1.8 million together, and nothing newer has turned up. The larger is a $1.5 million El Pollo Loco at 1115 Telfair in Weslaco, a 2,954 square foot restaurant registered after its listed start date of Sep 21. Boultinghouse Simpson Gates is the design firm, and Felipe Guerrero is the designer of record. No general contractor is named, so pricing starts with the design firm.

The other is Sol Suites at 1629 N 10th in McAllen, a $300,000, 4,800 square foot interior finish listed to start Oct 5 and wrap up Jan 4, 2027, with Doroteo Garcia as designer of record. The job is hospitality finish work, with nothing in it for a framing crew. We haven’t confirmed city permits for either job.

Hidalgo and Cameron counties

Commercial filings with a dollar value

Filed or reported construction value.

Show data

Item	Value ($)
VRMC operating rooms	$1.6M
El Pollo Loco	$1.5M
Zaxby's Harlingen	$1.1M
Alton Gloor shell	$950K
Sol Suites	$300K
Tropical Smoothie	$200K
Paramount Jewelers	$70K

Cameron County’s filings run to shells and finish outs. Operating rooms at Valley Regional Medical Center (VRMC), filed at $1.6 million, listed a Sep 28 start, as did a $950,000 shell on Alton Gloor and a $200,000 Tropical Smoothie finish out. Paramount Jewelers followed on Sep 29 with $70,000 of tenant work. Whether any of them has broken ground is unknown.

Back in Hidalgo County, a Dollar Tree shell and a Champs white box in McAllen were listed to start Oct 1, and CareNow in Mission is listed for Oct 30. The largest filing on either county’s calendar, the $39.05 million Sonrisa Village Apartments in Cameron County, is set for Dec 11.

Hidalgo and Cameron counties

Listed start dates and one groundbreaking

Verified means a filing we rechecked. Announced means a ceremony reported by local press, with no building permit found through Oct 2.

verifiedannouncedthis week

Show data

Project	Start	End	Status
Saronic ceremony	Sep 30, 2026	open	announced
Alton Gloor shell	Sep 28, 2026	open	verified
Tropical Smoothie	Sep 28, 2026	open	verified
VRMC operating rooms	Sep 28, 2026	open	verified
Paramount Jewelers	Sep 29, 2026	open	verified
Champs white box	Oct 1, 2026	open	verified
Dollar Tree shell	Oct 1, 2026	open	verified
Sol Suites interior	Oct 5, 2026	open	verified
CareNow Mission	Oct 30, 2026	open	verified
Sonrisa apartments	Dec 11, 2026	open	verified

The residential pipeline to watch is in Brownsville. A city agenda for Oct 1 included 54.397 acres at 1001 Military Highway proposed for smaller single family lots, and the result of that vote has yet to be posted. Nine lots at 1903 Grove Lane cleared a first reading on Sep 22, with no dollar figure, contractor or second reading date attached.

If the Military Highway lots fail and Grove Lane stalls at first reading, near term residential work in Cameron County comes down to Harlingen’s permits and the Sonrisa start in December.

Materials

Gulf Coast retail diesel fell to $5.955 a gallon in the week ending Sep 28 from $6.177 the week before, erasing the previous week’s increase and dropping below the $6.027 of the week ending Sep 14. The next weekly figure is due Oct 7.

Retail prices, per piece

Studs, sheathing and rebar

Big box prices as of Oct 1. Local yard prices from the last check, on Sep 11.

Show data

Item	Value ($)
Big box 2x4x8	$3.98
Local yard 2x4x8	$3.49
Big box OSB sheet	$13.48
Big box #3 x 20 ft	$7.38
Local yard #3 x 20 ft	$5.79

Big box prices for lumber and block on Oct 1 were unchanged from the day before. A 2x4x8 stud cost $3.98, a 2x6x8 $7.18, a 7/16 inch OSB panel $13.48 and a half inch drywall sheet $14.98. An 8x8x16 concrete block was $2.99, and a 20 foot length of No. 3 rebar was $7.38. The local yard was cheaper when we last checked it on Sep 11, at $3.49 for the stud and $5.79 for the rebar.

We’d still keep a contingency on the concrete lines of any bid this fall. Construction producer prices were up 10.09% in the year through August, the latest reading.

Labor

Construction employment moved in opposite directions in the Valley’s two metros in August. The McAllen metro had 9,900 construction jobs, up 2.1%, while Brownsville Harlingen had 3,600, down 5.3%. So a contractor sizing framing crews in Cameron County shouldn’t go by McAllen’s permit count.

Unemployment in August was 6.3% in the McAllen metro and 6.5% in Brownsville Harlingen (not seasonally adjusted). We found no verified immigration enforcement action at a Valley construction site from Sep 25 through Oct 2. For a spec home in Hidalgo County, demand and the mortgage rate set the limits more than crew supply does.

Housing market

The national 30 year fixed rate averaged 7.28% in the week of Oct 1, by Freddie Mac’s count, up from 7.03% the week before and 6.34% a year earlier. Builders quoting buyer payments or writing bids this week should use that rate.

United States

30 year fixed mortgage rate

Weekly national average. Up a quarter point in the week of Oct 1.

Show data

Period	30 year
Sep 17	6.95%
Sep 24	7.03%
Oct 1	7.28%

Supply gives buyers little reason to hurry. July figures put the McAllen metro at 8.9 months of supply and Brownsville Harlingen at 6.6, against 5.5 months statewide. McAllen had 3,200 active listings, up 10.7%, even as sales rose to 405 at a median price of $250,500. Brownsville Harlingen is the tighter market, with 1,560 listings, down 6.0%, and 255 closed sales at a median of $255,000.

Zillow counts listings differently, and its numbers point the same way. It shows 3,608 McAllen listings at the end of July, up 9.97%, and 1,700 in Brownsville, down 4.66%. Zillow’s typical home value is $191,508 in McAllen and $207,319 in Brownsville. Redfin’s older May data had McAllen at 9.1 months of supply and Brownsville at 5.8.

Hakes Brothers is competing on financing. Along with its 4.75% rate, the builder lists $5,000 in closing help, an appliance package or up to $25,000 in flex money. Its starting prices range from $213,990 at Las Cruces, in the Donna school district, to $268,990 at Heights at Riverbend II in Brownsville. WestWind lists its Arboledas community in Hidalgo from $249,990. CJE cites Edinburg starting prices in the $250,000s and has mentioned a Harlingen groundbreaking without giving a date.

Hakes Brothers communities

Listed starting prices by community

Lowest listed price in each community, as of Oct 2.

Show data

Item	Value ($)
Las Cruces	$214K
Monte Cielo	$225K
Taylor Creek	$249K
Alberta Heights	$251K
Northwood Trails	$254K
Paloma Ranch	$260K
Riverbend II	$269K

Major projects

Saronic held a groundbreaking Sep 30 for its Port Alpha shipyard at the Port of Brownsville, and local press reported that construction began on the $3.2 billion project. Vice President JD Vance and Gov. Greg Abbott attended, along with Saronic chief executive Dino Mavrookas and port chairman Sergio Lopez. Brownsville Mayor John Cowen spoke of about 250 hires and operations as soon as 2028.

The ceremony has yet to produce any work to bid. No contract dollars have been published, and Cameron County records through Oct 2 show no new building permit for the shipyard.

Fluidstack is clearing about 1,100 acres near Rio Hondo, and no building permit had turned up through Oct 2. Zoho has bought land along Interstate 69 north of Edinburg, a tract reported Oct 2 at 1,000 acres, and has made no contractor or start date public.

Starbase may set a bond ceiling of at least $3 billion, tied to 1,000 jobs paying an average of $85,000, against an application for about $6 billion. No bond sale has been reported. NextDecade received a federal permit, reported Sep 29, for a proposed sixth LNG unit at Rio Grande LNG and is aiming for a decision in the second half of 2027.

Our view

We’d hold off on starting unsold entry level homes in Hidalgo County for the next 60 days. At 7.28%, payments are climbing for the buyers a spec house needs, and McAllen’s 8.9 months of supply gives them plenty to choose from. A small builder also has to price against Hakes Brothers and its 4.75% offer. Brownsville Harlingen is tighter at 6.6 months but still above the statewide 5.5. We’re confident about the rate. The supply figures are from July, and Zillow’s July count points the same way, so the market most likely stayed loose through the summer.

Interiors contractors have one near term job in Hidalgo County: Sol Suites in McAllen. We’d call the designer before pricing it, and we’d do the same before closing a number on the Weslaco restaurant, which names no general contractor.

We’d hold Cameron County framing crews at their current size. The shipyard held its ceremony but had no building permit through Oct 2.

Haul surcharges should track $5.955 diesel until the Oct 7 figure, and we’d keep the concrete contingency. Big box lumber prices are steady, and the local yard hasn’t been rechecked since Sep 11.

Forecast record

Forecast	Due	Status
No new unsold entry level home starts in Hidalgo County for 60 days	Dec 3	OPEN
Sol Suites stays a registered interior, with no confirmed start	Oct 12	OPEN
The Weslaco restaurant filing stays registered, with no confirmed start	Oct 18	OPEN
Starts listed for Sep 28 through Oct 1 stay shells and finish outs	Oct 8	OPEN
The shipyard ceremony produces no building permit	Dec 31	OPEN
Gulf Coast diesel holds near $5.955 until the next weekly figure	Oct 7	OPEN
The big box 2x4 at $3.98 remains the shelf price until a new local yard check	Oct 15	OPEN
McAllen supply shows no meaningful tightening from 8.9 months	Nov 15	OPEN
Fluidstack files no building permit	Dec 31	OPEN

Our diesel call was a MISS. We expected Gulf Coast diesel to hold at $6.177, and it fell to $5.955 in the week ending Sep 28. Two calls end as a PUSH. We didn’t recheck the local yard, so we can’t say whether its Sep 11 prices still undercut the big box shelf on Oct 1. The shipyard held its Sep 30 ceremony, but no building permit followed through Oct 2. The duty on Canadian sheathing, in effect since Aug 22, remains a HIT, and our call on May’s 9.1 months of McAllen supply stays OPEN through Oct 15.

Housing market data: Redfin, Zillow and Freddie Mac.